Friday, March 29, 2013

Latest US GDP Data Show Economy Weak at Year’s End but Corporate Profits Near Record High

The latest data from the Bureau of Economic Analysis confirm that the U.S. economy barely grew in Q4 2012. However, despite the weak economy, corporate profits as a share of GDP hit their second highest level ever.

Based on the latest data, the BEA revised Q4 real GDP growth upward from an annual rate of 0.1 percent to 0.4 percent, still the second-slowest quarterly growth since the recovery began in 2009. The following table compares the latest revision to the second estimate released last month.


Consumer spending was weaker than previously reported, with durable goods accounting for most of the growth that did take place. Fixed investment was a relative bright spot, led by business equipment and computers. However, growth of fixed investment was almost wholly offset by a decrease in nonfarm inventories. The BEA data provides no direct indication of the motive for inventory change, but it is easy to imagine that at least some businesses were showing caution about restocking, in view of anticipated tax increases and cuts in government spending for early 2013. >>>Read more

Follow this link to view or download a classroom-ready slideshow with more charts of the latest US GDP and profits data

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