Gross Domestic Product, Fourth Quarter and Annual 2018 (Initial Estimate)

Date: February 28, 2019

In the fourth quarter of 2018, Real gross domestic product (GDP) increased at an annual rate of 2.6 percent. For the third quarter realized a real GDP increased at a rate of 3.4 percent.

The BEA highlighted that, “Due to the recent partial government shutdown, this initial report for the fourth quarter and annual GDP for 2018 replaces the release of the “advance” estimate originally scheduled for January 30th and the “second” estimate originally scheduled for February 28th.”

The Bureau underlined that the fourth-quarter initial estimate released today is based on source data that are incomplete or subject to further revision by the source agency. Updated estimates for the fourth quarter, based on more complete data, will be released on March 28, 2019.

In the fourth quarter the increase in real GDP echoed positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, private inventory investment, and federal government spending. Those were partly offset by negative contributions from residential fixed investment, and state and local government spending.

However, the BEA also noted, “deceleration in real GDP growth in the fourth quarter reflected decelerations in private inventory investment, PCE, and federal government spending and a downturn in state and local government spending. These movements were partly offset by an upturn in exports and an acceleration in nonresidential fixed investment. Imports increased less in the fourth quarter than in the third quarter.”

Current dollar GDP increased 4.6 percent, or $233.2 billion, in the fourth quarter to a level of $20.89 trillion. In the third quarter, current-dollar GDP increased 4.9 percent, or $246.3 billion.

A 1.6 percent growth was recorded for the price index for gross domestic purchases in the fourth quarter compared with an increase of 1.8 percent in the third quarter. The PCE price index climbed1.5 percent, relative to an increase of 1.6 percent. Eliminating food and energy prices, the PCE price index rose 1.7 percent, compared with an increase of 1.6 percent.

Current-dollar personal income increased $225.1 billion in the fourth quarter, versus an increase of $190.6 billion in the third quarter. The acceleration in personal income reflected an upturn in farm proprietors’ income and accelerations in personal dividend income and personal interest income. Compensation of employees decelerated.

Disposable personal income increased $218.7 billion, or 5.7 percent, in the fourth quarter, compared with an increase of $160.9 billion, or 4.2 percent, in the third quarter. Real disposable personal income increased 4.2 percent, compared with an increase of 2.6 percent.

Personal savings was $1.06 trillion in the fourth quarter, compared with $996.0 billion in the third quarter.

Personal Saving Rate as a percentage of disposable personal income was 6.7 percent in the fourth quarter, compared with 6.4 percent in the third quarter.

Updates to third quarter GDI For the third quarter of 2018, the percent change in real GDI was revised from 4.3 percent to 4.6 percent based on newly available tabulations from the BLS Quarterly Census of Employment and Wages program.

2018 GDP

Real GDP reported for the year end increased 2.9 percent in 2018 (from the 2017 annual level to the 2018 annual level), compared with an increase of 2.2 percent in 2017.

The BEA stated that, “the acceleration in real GDP from 2017 to 2018 primarily reflected accelerations in nonresidential fixed investment, private inventory investment, federal government spending, exports, and PCE, and an upturn in state and local government spending that were partly offset by a downturn in residential investment.”

Current-dollar GDP for the year end increased 5.2 percent, or $1.02 trillion, in 2018 to a level of $20.50 trillion, compared with an increase of 4.2 percent, or $778.2 billion, in 2017. While Price index for gross domestic purchases increased 2.2 percent in 2018, compared with an increase of 1.9 percent in 2017. The

PCE price index increased 2.0 percent, compared with an increase of 1.8 percent. Excluding food and energy prices, the PCE price index increased 1.9 percent, compared with an increase of 1.6 percent.

The BEA also noted that, “during 2018 (measured from the fourth quarter of 2017 to the fourth quarter of 2018), real GDP increased 3.1 percent, compared with an increase of 2.5 percent during 2017. The price index for gross domestic purchases increased 2.1 percent during 2018, compared with an increase of 1.9 percent during 2017.”

 

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2019-02-28T19:29:23+00:00