Real (net of inflation) gross domestic product (GDP) rose at a seasonally adjusted annual rate of 3.1% in the fourth quarter, a deceleration from the 4% pace in the third quarter, according to today's “advance” estimate from the Bureau of Economic Analysis. For 2004 as a whole, real GDP climbed 4.4%, the fastest rate since 1999. Fourth-quarter results were dragged down by a 3.9% drop in real exports of goods and services, a turnaround from the 6% advance in the third quarter. Real gross domestic purchases, a measure that excludes exports, rose 4.7%, which was comparable to the previous six quarters and showed that U.S. consumers and businesses have not cut back on purchases.
Real gross private investment in nonresidential structures (including wells and mines) dropped 4.1% in the fourth quarter and 1.1% in the third. For the year, this measure rose 1%, the first increase since 2000, following decreases of 5.6% in 2003, 17.8% in 2002, and 2.3% in 2001. The price index for private nonresidential structures jumped 10% for the second straight quarter and accelerated for the sixth time in a row after being unchanged in the second quarter of 2003. In contrast, the GDP price index rose just 2% for the quarter and 2.1% for 2004 as a whole.