The third estimate of U.S. fourth-quarter Gross Domestic Product growth showed another upgrading in the pace of economic activity to a 0.4% annualized rate, from the 0.1% gain reported in the second estimate and the advanced report that showed a 0.1% decline.
The overall 0.3-percentage-point (ppt) upward revision was accounted for by a 0.1-ppt increase in the contribution from net trade and a 0.3-ppt increase in the add from nonresidential construction. These increases were in part offset by slower consumer spending on services which increased at a 0.6% annualized rate in the quarter, slower than the previous estimate of 0.9%.
The main thrust of the report was unchanged with final domestic demand growth of 1.5%. Inventories subtracted 1.5 ppts from overall GDP growth in the quarter while government spending trimmed the annualized growth rate by a further 1.4 ppts. Despite the upwardly revised quarterly reading, reported annual growth in 2012 as a whole was unchanged from the previous 2.2% estimate.
Corporate profits increased at a 2.3% annualized pace in the fourth quarter, narrowly below the 2.4% pace of Q3. In 2012, pre-tax corporate profits increased by 6.8%, slower than 2011's gain of 7.3%.
