GDP Rose at 0.2% Pace in 4Q
Trucking is extremely sensitive to economic conditions and signs that the recession is ending – or has ended – are good news for the industry.
Gross domestic product, the total value of all goods and services produced in the U.S., rose at a 0.2% annual rate from October to December, after falling at a 1.3% percent pace in the third quarter. Analysts were expecting the economy to shrink at a 1.1% pace in the fourth quarter, Bloomberg said.
This positive reading means that economists could date the end of the recession around the end of last year or the beginning of this year, the Associated Press reported.
However, Commerce said personal spending in the fourth quarter increased at the fastest annual rate in almost two years. At the same time, inventories declined at a record pace.
Spending rose at a 5.4% annual pace during the quarter, with the auto industry among the industries that benefited the most. Real final sales, which exclude inventories, rose at a 2.5% annual pace in the fourth quarter, after dropping at a 0.5% in the third quarter.
Inventories were slashed by a record $120.6 billion in the final quarter of 2001, breaking the previous record of $61.9 billion cut in the previous quarter. Falling inventories subtract from GDP because production is cut until stockpiles are depleted.
GDP was also helped by the largest increase in government spending in 15 years. It rose at a 9.2 percent annual pace, while military spending increased at a 9.3% percent rate, as the war against terrorism continued.
For all of 2001, the economy expanded 1.1%, the weakest performance since 1991, the year in which the last recession ended. Still, from April to December of last year, the economy shrank at only a 0.3% percent annual rate, well below the rate during the previous recession.
Commerce also said in its report that the GDP price deflator, a gauge of inflation, fell at a 0.3% annual rate.
