Real GDP grew at an annual rate of 3.2% in the fourth quarter of 2023, according to the “second” estimate released by the Bureau of Economic Analysis. Real GDP increased 4.9% in the third quarter. The second estimate fell 0.1 percentage points (pp) from an annual rate of 3.3% in the “advance” estimate, reflecting a downward revision to private inventory investment that was partly offset by upward revisions to state and local government spending and consumer spending.
The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
Consumption added 2.0 pp to growth, following a 2.11 pp addition in the third quarter of 2023. The increase in PCE was driven by services (1.28 pp) such as those in the household consumption expenditure: health care (0.64 pp), food services and accommodations (0.38 pp), and other services (0.24 pp) added to growth. Financial services and insurance subtracted 0.12 pp from real GDP growth. Goods contributed 0.72 pp to growth which included other nondurable goods (0.25 pp), recreational goods and vehicles (0.18 pp), other durable goods (0.09 pp), and food and beverages purchased for off-premises consumption (0.08 pp). Motor vehicles and parts subtracted 0.06 pp from real GDP growth. Inventories subtracted 0.27 pp.
Business investment added 0.43 pp to GDP. Nonresidential fixed investment added 0.32 pp, with structures adding 0.23 pp, equipment subtracting 0.08 pp, and intellectual property products adding 0.18 pp. Transportation equipment, a part of equipment, subtracted 0.27 pp. Residential fixed investment added 0.11 pp.
Government spending added 0.73 pp to GDP. Federal and state-local government added 0.15 pp and 0.58 pp to GDP, respectively.
Exports added 0.69 pp to GDP while imports subtracted 0.37 pp.
Read the BEA release.
