Fourth quarter real gross domestic product (GDP) growth was revised to a 1.4% annual rate, well above expectations and up from the initial reading of 0.2%. That isolates the third quarter 2001 drop in GDP, and leaves it the only negative quarter since the 1991 recession. For all of 2001, the U.S. economy grew at a 1.2% pace.
The upward revision came from consumer spending and trade. The GDP purchases price index remains at 0.4%. Business investment fell 11.0%, slightly less than the 12.8% initially reported, and government spending was revised even further upward, to a 10.1% rise. The trade revision was primarily in imports, where the decline was revised to 6.9% from 3.4%. The big surprise was inventories, which were revised to show a decline of $120 billion, less than the previous report. The picture for the real economy is looking stronger, says S&P Chief Econonist David Wyss.