The US economy grew at a 3.1% annualized rate in Q4 2004, according to the Advance report by the Bureau of Economic Analysis. Advance reports are based on incomplete data, and will be refined when the Preliminary report is issued on February 25th. Economists were expecting GDP growth of 3.6%.
Personal consumption, equipment and software, and government spending were key drivers to fourth quarter growth. Growth was hampered by the trade deficit, as imports serve to offset GDP growth numbers. In addition, exports were down for the quarter vs. Q3.
The good news is that the economy expanded at a 4.4% rate in 2004. Over the past 16 years, only 2 years have witnessed higher GDP growth. In 1997 and 1999 the economy grew at a 4.5% clip. This is further proof that 2004 was indeed an outstanding year for economic growth.