Real gross domestic product increased at an annual rate of 2.1 percent in the fourth quarter of 2016, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter of 2016, real GDP increased 3.5 percent.
Real gross domestic income increased 1 percent in the fourth quarter, compared with an increase of 5 percent in the third. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.5 percent in the fourth quarter, compared with an increase of 4.3 percent in the third quarter.
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the fourth quarter reflected downturns in exports and in federal government spending, an acceleration in imports, and a deceleration in nonresidential fixed investment that were partly offset by accelerations in private inventory investment and in PCE, and upturns in residential fixed investment and in state and local government spending.
Current-dollar GDP increased 4.2 percent, or $194.1 billion, in the fourth quarter to a level of $18,869.4 billion. In the third quarter, current-dollar GDP increased 5 percent, or $225.2 billion.
The price index for gross domestic purchases increased 2 percent in the fourth quarter, compared with an increase of 1.5 percent in the third quarter. The PCE price index increased 2 percent, compared with an increase of 1.5 percent in third quarter. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 1.7 percent in the third quarter.
Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $11.2 billion in the fourth quarter of 2016, compared with an increase of $117.8 billion in the third quarter.
Profits of domestic financial corporations increased $26.5 billion in the fourth quarter, compared with an increase of $50.1 billion in the third. Profits of domestic nonfinancial corporations decreased $60.4 billion, in contrast to an increase of $66.4 billion.
In 2016, profits from current production decreased $2.3 billion, compared with a decrease of $64 billion in 2015. Profits of domestic financial corporations increased $20.5 billion, compared with an increase of $8.5 billion. Profits of domestic nonfinancial corporations decreased $47 billion, compared with a decrease of $47.3 billion. The rest-of-the-world component of profits increased $24.3 billion, in contrast to a decrease of $25.2 billion.
