US fourth-quarter GDP growth revised lower to a 0.5% rate

WASHINGTON, April 9 (Reuters) - U.S. economic ‌growth slowed more ​than ​previously estimated in the fourth quarter amid downgrades to business investment, including inventory accumulation, but corporate profits increased sharply, government data showed on ‌Thursday.

Gross domestic product increased at a downwardly revised 0.5% annualized rate, the ⁠Commerce Department's Bureau of Economic Analysis said in its third GDP estimate. The economy was previously ‌reported to have grown at ‌a 0.7% pace in the fourth quarter. The advance estimate had put GDP growth at 1.4%.

Economists polled by Reuters had forecast GDP growth would be unrevised at ​a 0.7% rate. Revisions to the fourth quarter's growth pace reflected downgrades to business spending on intellectual products as well as inventories.

Growth in consumer spending, ⁠which accounts for more than two-thirds of the economy, was revised down to a 1.9% pace from the previously ​reported 2.0% rate.

Last year's shutdown of the government was the key driver of the slowdown from the third quarter's 4.4% growth pace.

Neither ​the third- nor fourth-quarter GDP readings are true ‌reflections of the economy's health.

Final sales to private domestic purchasers, which excludes government, trade and inventories, grew at a 1.8% pace ⁠in the fourth quarter. This measure of domestic demand, closely watched by policymakers, was previously estimated to have increased at a 1.9% rate. Domestic demand grew at a 2.9% pace in ⁠the July-September quarter.

Profits from current production increased at a rate of $246.9 billion in the fourth quarter, ​surging from a $175.6 billion growth pace in the third quarter.

When measured from the income side, the economy grew at a 2.6% rate in the fourth quarter. Gross domestic income increased at ‌a 3.5% pace in the July-September quarter.

The average of GDP and GDI, also referred to as gross domestic output and considered ‌a better measure of economic activity, grew at a 1.5% rate. Gross domestic output grew ⁠at a 4.0% rate in the ‌third quarter.

Though growth likely picked ​up in the first quarter, the U.S.-Israeli war on Iran is casting a cloud over the economy.

(Reporting by Lucia Mutikani; Editing by ‌Andrea Ricci)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Tapestry forecasts strong annual profit as Coach draws young shoppers
• How will Latin America's super El Niño affect the top food-exporting region?
• In record US wildfire season, firefighter entrapments hit 20-year high