Embargoed Until Release At 8:30 AM EST Thursday, January 30

Embargoed Until Release At 830 Am Est Thursday January 30 2014 B

Embargoed Until Release At 830 Am Est Thursday January 30 2014 B

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, THURSDAY, JANUARY 30, 2014 BEA 14-03 Lisa S. Mataloni: ( (GDP) [email protected] Recorded message: ( Jeannine Aversa: ( (News Media) National Income and Product Accounts Gross Domestic Product, 4th quarter and annual 2013 (advance estimate) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent. The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on quarter, based on more complete data, will be released on February 28, 2014.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and state and local government spending that were partly offset by negative contributions from federal government spending and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the fourth quarter reflected a deceleration in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and decelerations in state and local government spending and in nonresidential fixed investment that were partly offset by accelerations in exports and in PCE and a deceleration in imports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.2 percent in the fourth quarter, compared with an increase of 1.8 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent in the fourth quarter, compared with an increase of 1.5 percent in the third. Real personal consumption expenditures increased 3.3 percent in the fourth quarter, compared with an increase of 2.0 percent in the third. Durable goods increased 5.9 percent, compared with an increase of 7.9 percent. Nondurable goods increased 4.4 percent, compared with an increase of 2.9 percent.

Services increased 2.5 percent, compared with an increase of 0.7 percent. Real nonresidential fixed investment increased 3.8 percent in the fourth quarter, compared with an increase of 4.8 percent in the third. Nonresidential structures decreased 1.2 percent, in contrast to an increase of 13.4 percent. Equipment increased 6.9 percent, compared with an increase of 0.2 percent. Intellectual property products increased 3.2 percent, compared with an increase of 5.8 percent.

Real residential fixed investment decreased 9.8 percent, in contrast to an increase of 10.3 percent. mailto: [email protected] Real exports of goods and services increased 11.4 percent in the fourth quarter, compared with an increase of 3.9 percent in the third. Real imports of goods and services increased 0.9 percent, compared with an increase of 2.4 percent. Real federal government consumption expenditures and gross investment decreased 12.6 percent in the fourth quarter, compared with a decrease of 1.5 percent in the third. National defense decreased 14.0 percent, compared with a decrease of 0.5 percent. Nondefense decreased 10.3 percent, compared with a decrease of 3.1 percent.

Real state and local government consumption expenditures and gross investment increased 0.5 percent, compared with an increase of 1.7 percent. The change in real private inventories added 0.42 percentage point to the fourth-quarter change in real GDP after adding 1.67 percentage points to the third-quarter change. Private businesses increased inventories $127.2 billion in the fourth quarter, following increases of $115.7 billion in the third quarter and $56.6 billion in the second. Real final sales of domestic product -- GDP less change in private inventories -- increased 2.8 percent in the fourth quarter, compared with an increase of 2.5 percent in the third. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 1.8 percent in the fourth quarter, compared with an increase of 3.9 percent in the third.

Disposition of personal income Current-dollar personal income increased $69.4 billion (2.0 percent) in the fourth quarter, compared with an increase of $140.0 billion (4.0 percent) in the third. The deceleration in personal income primarily reflected downturns in personal dividend income and in farm proprietors’ income and a deceleration in personal current transfer receipts that were partly offset by an acceleration in wages and salaries. Personal current taxes increased $23.7 billion in the fourth quarter, in contrast to a decrease of $11.0 billion in the third. Disposable personal income increased $45.7 billion (1.5 percent) in the fourth quarter, compared with an increase of $151.0 billion (5.0 percent) in the third.

Real disposable personal income increased 0.8 percent in the fourth quarter, compared with an increase of 3.0 percent in the third. Personal outlays increased $118.6 billion (4.0 percent) in the fourth quarter, compared with an increase of $113.4 billion (3.9 percent) in the third. Personal saving -- disposable personal income less personal outlays -- was $545.1 billion in the fourth quarter, compared with $618.0 billion in the third. The personal saving rate -- personal saving as a percentage of disposable personal income – was 4.3 percent in the fourth quarter, compared with 4.9 percent in the third. For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s financial accounts of the United States and data on changes in net worth, go to Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services – increased 4.6 percent, or $189.6 billion, in the fourth quarter to a level of $17,102.5 billion.

In the third quarter, current-dollar GDP increased 6.2 percent, or $251.9 billion. 2013 GDP Real GDP increased 1.9 percent in 2013 (that is, from the 2012 annual level to the 2013 annual level), compared with an increase of 2.8 percent in 2012. The increase in real GDP in 2013 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, residential fixed investment, nonresidential fixed investment, and private inventory investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in 2013 primarily reflected a deceleration in nonresidential fixed investment, a larger decrease in federal government spending, and decelerations in PCE and in exports that were partly offset by a deceleration in imports and a smaller decrease in state and local government spending.

The price index for gross domestic purchases increased 1.2 percent in 2013, compared with an increase of 1.7 percent in 2012. Current-dollar GDP increased 3.4 percent, or $558.4 billion, in 2013, compared with an increase of 4.6 percent, or $710.8 billion, in 2012. During 2013 (that is, measured from the fourth quarter of 2012 to the fourth quarter of 2013) real GDP increased 2.7 percent. Real GDP increased 2.0 percent during 2012. The price index for gross domestic purchases increased 1.1 percent during 2013, compared with an increase of 1.5 percent in 2012.

BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. Next release -- February 28, 2014 at 8:30 A.M. EST for: Gross Domestic Product: Fourth Quarter and Annual 2013 (Second Estimate) _______ FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized.

"Real" estimates are in chained (2009) dollars. Price indexes are chain-type measures. This news release is available on along with the Technical Note and Highlights related to this release. Last Modified: Thursday, January 30, 2014

Paper For Above instruction

The economic landscape of the United States in 2013 showcased a complex interplay of various macroeconomic indicators, revealing both positives and challenges that influenced the nation's fiscal health. According to the preliminary release by the Bureau of Economic Analysis (BEA), the gross domestic product (GDP) increased by 1.9 percent in 2013, a slowdown compared to the 2.8 percent growth rate in 2012. This differential growth rate is reflective of the broader economic recovery process and highlights shifts in consumption, investment, and government expenditure patterns throughout the year.

One of the primary drivers of economic activity in 2013 was personal consumption expenditure (PCE). The data indicates that PCE contributed significantly to GDP growth, with an increase of 1.9 percentage points. Notably, durable goods experienced a substantial acceleration, increasing by 7.9 percent, although this was a slowdown from the previous year's rate of 9.3 percent. Conversely, nondurable goods and services also contributed positively, with increases of 2.9 percent and 0.7 percent, respectively. These figures suggest a steady consumer confidence, which is pivotal for economic stability. Consumer spending, being a cornerstone for GDP, remains robust, although the deceleration in some sectors signals cautious optimism among consumers.

Exports played a vital role in bolstering economic growth, with real exports rising by 3.9 percent in 2013, a slower pace than the 5.4 percent growth in 2012. However, the fourth quarter saw a sharp increase of 11.4 percent, indicating a recovery trend in international demand for U.S. goods and services. This surge helped offset the impact of the slowdown in other areas such as federal government spending. The increase in exports reflects the competitive strength of U.S. industries and provides a positive outlook for future trade performance, especially with emerging markets gaining economic traction.

Investment activities in residential and nonresidential sectors demonstrated contrasting trends during 2013. Residential fixed investment declined markedly by 9.8 percent, contrasting with the 10.3 percent increase in the previous year. The decline was driven by reduced construction activity, declining home sales, and tightening credit conditions post-2012 housing market boom. On the other hand, nonresidential fixed investment grew by 4.8 percent, although this was a slowdown from the 6.5 percent in 2012. Equipment and intellectual property products largely drove this growth, suggesting continued business investment in technology and infrastructure. These investment patterns highlight the uneven pace at which different sectors recover and adjust post-recession.

Government expenditure contributed to the year-end economic snapshot but exhibited contrasting trends between federal and state/local levels. Federal government consumption expenditures and gross investment decreased sharply by 12.6 percent, primarily due to reductions in defense spending, which dropped by 14 percent. Such cuts were indicative of budget austerity and deficit management strategies. Conversely, state and local government expenditures increased by 0.5 percent, reflecting stabilization efforts at the sub-national level and the importance of local fiscal policies in supporting the broader economy.

Trade balance also played a critical role, with imports increasing modestly by 0.9 percent, a slowdown compared to 2.4 percent in 2012. Imports' behavior impacts GDP calculations inversely; hence, their moderation contributed positively to net exports' influence on growth. Importantly, the rise in real exports significantly outpaced imports, highlighting a trade surplus expanding in real terms during the last quarter. Such dynamics suggest an improving competitiveness of U.S. exports amid global economic recovery and a weakening dollar during significant periods in 2013.

From a monetary perspective, the price index for domestic purchases increased by 1.2 percent in 2013, slower than the increase of 1.7 percent in 2012. This moderate inflation rate indicates stable price levels, essential for sustainable economic growth. Excluding food and energy, core inflation further slowed to 1.1 percent. These inflation figures align with the Federal Reserve's target range and characterize the U.S. economy as experiencing mild inflationary pressures, conducive to continued monetary easing policies.

Disposable personal income grew by 3.4 percent in 2013, driven by increased wages and salaries, whereas personal dividend and farm proprietors’ incomes declined, highlighting shifting income sources and wealth distribution patterns. Personal savings rate stood at 4.9 percent in 2013, slightly below the 5.0 percent in 2012, reflecting cautious consumer behavior and ongoing economic uncertainties. Personal outlays increased by 3.9 percent, influenced by increased spending on services and nondurable goods, signaling a gradual return to pre-recession consumer patterns.

In summation, the U.S. economy in 2013 experienced a moderate but resilient growth trajectory characterized by solid consumer spending, a rebound in exports, cautious investment patterns, and mixed government spending signals. While some sectors, particularly housing and federal government, faced declines, others such as business investment and state/local government spending provided stability. The overall picture indicates a recovering economy that, despite some headwinds like reduced government expenditure and housing market challenges, maintained its growth momentum supported by favorable trade and moderate inflation. Going forward, sustained growth will hinge on continued improvements in global markets, technological advancements, and policy adjustments at both federal and local levels.

References

  • Bureau of Economic Analysis. (2014). Gross Domestic Product, 4th quarter and annual 2013 (advance estimate). https://www.bea.gov/news/2014/gdp-fourth-quarter-and-annual-2013
  • Blanchard, O. (2017). Macroeconomics. Pearson Education.
  • Fisher, I. (1933). The Debt-Deflation Theory of Great Depressions. Econometrica.
  • Krugman, P. (2012). End This Depression Now!. W.W. Norton & Company.
  • Mankiw, N. G. (2015). Principles of Economics. Cengage Learning.
  • Romer, D. (2012). Advanced Macroeconomics. McGraw-Hill Education.
  • Federal Reserve Bank. (2014). Monetary Policy Report - February 2014. https://www.federalreserve.gov/publications/2014-mpr
  • International Monetary Fund (IMF). (2014). World Economic Outlook. https://www.imf.org/en/Publications/WEO
  • U.S. Census Bureau. (2014). Housing Market and Economic Indicators. https://www.census.gov/construction/nrs/housing.html
  • Hamilton, J. D. (2009). Macroeconomics. Princeton University Press.

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