GDP Fell .1% In 4th Qtr 2012: Will Obama Blame Fox or Bush?

Is this the start of a recession? According to the US Dept. of Commerce Real gross domestic product (GDP) -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.1 percent in the fourth quarter of 2012.  A recession is usually defined  as two consecutive downward GDP quarterly reports

Keep in mind that this estimate will be revised at the end of February and again at the end of March (which  means it could go down or up).

The decrease in real GDP in the fourth quarter primarily reflected negative contributions from private inventory investment, federal government spending, and exports that were partly offset by positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased. The downturn in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in imports, and an acceleration in PCE. Final sales of computers added 0.15 percentage point to the fourth-quarter change in real GDP after adding 0.11 percentage point to the third-quarter change. Motor vehicle output added 0.04 percentage point to the fourth-quarter change in real GDP after subtracting 0.25 percentage point from the third-quarter change. 

There is no word whether the President will blame Fox News, Mitt Romney, House GOP, the Tea Party or former President George W. Bush for the GDP slowdown.  The full report follows:

National Income and Product Accounts
Gross Domestic Product, 4th quarter and annual 2012 (advance estimate)

       The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the fourth quarter, compared with an increase of 1.4 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 1.1 percent in the fourth quarter, compared with an increase of 1.2 percent in the third.       

Real personal consumption expenditures increased 2.2 percent in the fourth quarter, compared with an increase of 1.6 percent in the third.  Durable goods increased 13.9 percent, compared with an increase of 8.9 percent.  Nondurable goods increased 0.4 percent, compared with an increase of 1.2 percent.  Services increased 0.9 percent, compared with an increase of 0.6 percent.        

Real nonresidential fixed investment increased 8.4 percent in the fourth quarter, in contrast to a decrease of 1.8 percent in the third.  Nonresidential structures decreased 1.1 percent; it was unchanged in the third quarter.  Equipment and software increased 12.4 percent in the fourth quarter, in contrast to a decrease of 2.6 percent in the third.  Real residential fixed investment increased 15.3 percent, compared with an increase of 13.5 percent.       

Real exports of goods and services decreased 5.7 percent in the fourth quarter, in contrast to an increase of 1.9 percent in the third. 

Real imports of goods and services decreased 3.2 percent, compared with a decrease of 0.6 percent.       

Real federal government consumption expenditures and gross investment decreased 15.0 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third.  National defense decreased 22.2 percent, in contrast to an increase of 12.9 percent.  Nondefense increased 1.4 percent, compared with an increase of 3.0 percent. 

Real state and local government consumption expenditures and gross investment decreased 0.7 percent, in contrast to an increase of 0.3 percent.       

The change in real private inventories subtracted 1.27 percentage points from the fourth-quarter change in real GDP after adding 0.73 percentage point to the third-quarter change.  Private businesses increased inventories $20.0 billion in the fourth quarter, following increases of $60.3 billion in the third and $41.4 billion in the second.        

Real final sales of domestic product -- GDP less change in private inventories -- increased 1.1 percent in the fourth quarter, compared with an increase of 2.4 percent in the third.   Gross domestic purchases       

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 0.1 percent in the fourth quarter, compared with an increase of 2.6 percent in the third.   Disposition of personal income       

Current-dollar personal income increased $256.2 billion (7.9 percent) in the fourth quarter, compared with an increase of $72.7 billion (2.2 percent) in the third.  The acceleration in personal income primarily reflected a sharp acceleration in personal dividend income, an upturn in personal interest income, and an acceleration in wage and salary disbursements.  

The sharp acceleration in personal dividend income reflected accelerated and special dividends that were paid by many companies in the fourth quarter in anticipation of changes in individual income tax rates.  The upturn in personal interest income primarily reflected an upturn in interest rates for Treasury Inflation Protected Securities. The acceleration in wages and salaries reflected the pattern of monthly Bureau of Labor Statistics employment, hours, and earnings data for the fourth quarter, as well as a judgmental estimate of accelerated compensation in the form of bonus payments and other irregular pay in the fourth quarter.       

Personal current taxes increased $21.0 billion in the fourth quarter, compared with an increase of $10.0 billion in the third.       

Disposable personal income increased $235.2 billion (8.1 percent) in the fourth quarter, compared with an increase of $62.7 billion (2.1 percent) in the third.  Real disposable personal income increased 6.8 percent, compared with an increase of 0.5 percent.       

Personal outlays increased $95.0 billion (3.3 percent) in the fourth quarter, compared with an increase of $88.6 billion (3.1 percent) in the third.  Personal saving -- disposable personal income less personal outlays -- was $570.0 billion in the fourth quarter, compared with $429.8 billion in the third. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 4.7 percent in the fourth quarter, compared with 3.6 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 flow of funds accounts and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.  

Current-dollar GDP       

Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 0.5 percent, or $18.0 billion, in the fourth quarter to a level of $15,829.0 billion. 

In the third quarter, current-dollar GDP increased 5.9 percent, or $225.4 billion.   2012 GDP  

Real GDP increased 2.2 percent in 2012 (that is, from the 2011 annual level to the 2012 annual level), compared with an increase of 1.8 percent in 2011.       

The increase in real GDP in 2012 primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment, and private inventory investment that were partly offset by negative contributions from federal government spending and from state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.       

The acceleration in real GDP in 2012 primarily reflected a deceleration in imports, upturns in residential fixed investment and in private inventory investment, and smaller decreases in state and local government spending and in federal government spending that were partly offset by decelerations in PCE, exports, and nonresidential fixed investment.       

The price index for gross domestic purchases increased 1.7 percent in 2012, compared with an increase of 2.5 percent in 2011.       

Current-dollar GDP increased 4.0 percent, or $600.3 billion, in 2012, compared with an increase of 4.0 percent, or $576.8 billion, in 2011.        During 2012 (that is, measured from the fourth quarter of 2011 to the fourth quarter of 2012) real GDP increased 1.5 percent. 

Real GDP increased 2.0 percent during 2011.  The price index for gross domestic purchases increased 1.5 percent during 2012, compared with an increase of 2.5 percent during 2011.