According to US Commerce Department, the country’s GDP advanced at a 1.4% seasonally adjusted annual rate in the fourth quarter of 2015. That was an upward revision from the previous month’s estimate of 1% growth. In the prior quarter, the increase was 2%.
US economy expanded 2.4% for the full year 2015 which matched the result of 2014.
Experts say that quarterly revision was mainly due to higher consumer spending on transportation and recreation services. Meanwhile, the decline in exports was less severe than the previous estimate.
Sam Bullard, a senior economist at Wells Fargo Securities LLC, noted that pace of economic growth slowed down by the end of 2015. The key factor is consumer spending.
Consumer spending accounts for about 70% of gross domestic product of the United States. During the fourth quarter spending advanced at a 2.4% rate, up from the prior reading of 2%. This put positive contribution by 1.66% to annual GDP compared to the previous estimate of 1.4%.
Foreign trade was revised to a 0.14% drag from the previous reading of a 0.25% drag on growth.
In October-December 2015, adjusted pretax profits of American companies sank by a 7.8% annual rate in the fourth quarter, the most since January-March 2011. In the third quarter of 2015, the decline was 1.6%. For the whole 2015, the US corporate profits dropped 3.1%, the biggest fall since 2008.
In the fourth quarter, the core PCE gauge, which excludes volatile food and energy costs, slowed to 1.3% from 1.4% in the preceding quarter.
