Earlier today, the Commerce Department released its final estimate of
fourth-quarter 2003 gross domestic product. Commerce reported that real GDP
expanded at an annual rate of 4.1% during the quarter, unchanged from the 4.1% rate
reported in its preliminary estimate, released on 2/27. During last year's
third quarter, GDP rose at an 8.2% annual rate.
The three-month period ended December was the ninth consecutive quarter
of reported real growth, with the Commerce Department's 4.1% final estimate
coming in right on the consensus forecast, which was 4.1%.
In comparing the final fourth-quarter numbers with the Commerce
Department's final estimate for the third quarter, real GDP was up $107.0 billion or
about 1.020%. Add one, then raise this to the fourth power, and you get the
rounded annual rate of change of 4.1%.
Versus 2002's fourth quarter, real GDP was up $439.3 billion, or 4.3%.
The respective numbers: 4Q2003 = $10600.1 billion; 4Q2002 = $10160.8 billion.
Areas adding to growth in the final versus preliminary reports, in order
of their dollar contribution, were: (1) personal consumption expenditures
(+$9.3 billion), and (2) nonresidential fixed investment (capital spending, +$3.5
billion).
Areas subtracting from growth in the final versus preliminary reports
were: (1) inventory change (-$5.9 billion, (2) government spending (-$4.4
billion), (3) residential fixed investment (housing, -$0.9 billion), and (4) net
exports (-$0.8 billion).
In the Commerce Department's report today, inventory change was revised
downward by $5.9 billion. Nevertheless, looking at the fourth-quarter final
estimate versus the final estimate for last year's third quarter, inventory
rebuilding accounted for a healthy $18.1 billion or 16.9% of the fourth quarter's
total $107.0 billion growth in real GDP.
The latest report contained upward revisions to the key GDP inflation
measures. The deflators used for overall GDP and for personal consumption
expenditures were revised to 1.5% and 1.0%, from 1.2% and 0.8%, respectively.
The following table breaks out in greater detail the numbers discussed
above.
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FINAL ESTIMATE OF FOURTH-QUARTER 2003
REAL GROSS DOMESTIC PRODUCT (Released
03/25 -- Billions of 2000 Chained Dollars
at Seasonally Adjusted Annual Rates)
--------------------------------------------------
4Q2003 3Q2003 Change/
Final Final Impact
------------------------
Real GDP 10600.1 10493.1 +4.1%
Inventory Change 9.0 -9.1 +$18.1
Real Final Sales 10586.4 10497.7 +3.4%
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Components of GDP
-----------------
Personal Consumption 7486.2 7426.6 +3.2%
Nonres. Fixed Investment* 1169.4 1139.5 +10.9%
Resid. Fixed Investment 526.6 516.7 +7.9%
Net Exports -515.2 -505.2 -$10.0
Government Purchases* 1910.7 1911.1 -0.1%
--------------------------------------------------
Implicit Price Deflators:
Gross Domestic Product 1.5% 1.6% --
Gross Domestic Purchases 1.0% 1.8% --
--------------------------------------------------
*MEMO ITEMS
-----------
Government Purchases
--------------------
Total 1910.7 1911.1 -0.1%
State & Local 1195.9 1197.4 -0.5%
Federal 715.5 714.3 +0.7%
National Defense 474.7 471.2 +3.0%
Nonresidential
Fixed Investment
----------------
Total 1169.4 1139.5 +10.9%
Structures 236.9 237.7 -1.3%
Equipment & Software 939.7 907.7 +14.9%
Info. Processing
Equip. & Software 559.5 537.7 +17.2%
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MAJOR GDP COMPONENTS -- CHANGES BETWEEN
"FINAL" AND "PRELIMINARY" 4Q2003 ESTIMATES
(Billions of 2000 Chained Dollars at
Seasonally Adjusted Annual Rates)
---------------------------------------------------
4Q2003 4Q2003
Final Prelim. Change
----------------------------
Real GDP 10600.1 10599.2 +0.9
Inventory Change +9.0 +14.9 -5.9
Real Final Sales 10586.4 10580.0 +6.4
---------------------------------------------------
Personal Consumption 7486.2 7476.9 +9.3
Nones. Fixed Invest. 1169.4 1165.9 +3.5
Resid. Fixed Invest. 526.6 527.5 -0.9
Net Exports -515.2 -514.4 -0.8
Govt. Purchases 1910.7 1915.1 -4.4
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REAL GROSS DOMESTIC PRODUCT (SEASONALLY
ADJUSTED ANNUAL RATES, 2000 CHAINED DOLLARS)
Year Q1 Q2 Q3 Q4
----------------------------------------
2003 2.0% 3.1% 8.2% 4.1%
2002 4.7% 1.9% 3.4% 1.3%
2001 -0.2% -0.6% -1.3% 2.0%
2000 1.0% 6.4% -0.5% 2.1%
1999 3.4% 3.4% 4.8% 7.3%
1998 4.5% 2.7% 4.7% 6.2%
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MEMO ITEM: Annual change in real GDP
before and after the "comprehensive
revision" published by the Commerce
Department on 12/10/03.
----------------------------------------
1929-2002 1959-1992 1992-2002
---------------------------------
After 3.4% 3.4% 3.2%
Before 3.4% 3.4% 3.2%
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