The U.S. economy expanded at a strong, 5.7% annual rate in the fourth quarter of 2009, the Commerce Department said in issuing a preliminary estimate on U.S. gross domestic product (GDP).
The “advance” estimate pegged economic growth in the quarter at the strongest pace since 2003, and significantly stronger than the 2.2% growth reported for the third quarter of last year. A follow-up estimate on fourth-quarter GDP is scheduled for release on Feb. 26.
Commerce’s Bureau of Economic Analysis said the increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, exports, and personal consumption expenditures. Imports, which constitute a subtraction in the calculation of GDP, also increased.
The economic expansion for the last two quarters of 2009 apparently marked the end of the steep recession that resulted in economic contraction during the previous four quarters. Economic contraction for 2009 as a whole remained on the negative side of the ledger, however, as GDP fell 2.4%.
A key factor in the fourth-quarter growth was business spending on equipment and software, which rose a reported 13.3%. Also major contributors were consumer spending, which posted a 2% increase, and exports, which grew 18.1%. The growth in exports more than offset a 10.1% gain in imports.
The estimated figures indicate that gross private domestic investment in nonresidential structures expanded 2.9% in the quarter, following a 5.9% contraction in the fourth quarter. Private residential investment rose 5.7%, on the heels of an 18.9% expansion in the third quarter. Investment in both nonresidential and residential remained well below fourth-quarter 2008 levels, however.
Despite the acceleration in GDP, the nation’s persistent high unemployment rate is expected to restrain economic expansion during the rest of 2010. Current estimates suggest GDP expansion could remain below 3% for the year.