POLITICS: PennAve

Economy grows at 3.2 percent in fourth quarter of 2013

By |
Debt Ceiling,PennAve,Joseph Lawler,Economy,Budgets and Deficits,Government Shutdown

Economic growth for the fourth quarter clocked in at a healthy 3.2 percent on an annualized basis, the Bureau of Economic Analysis reported in its initial estimate of gross domestic product Thursday morning.

While that number was down from the third quarter's surprisingly strong 4.1 percent reading, it represents relatively strong growth throughout a period of political turmoil that included a prolonged government shutdown combined with a bruising confrontation over the debt ceiling and the implementation of broad-based sequester spending cuts.

Falling government spending, with slowed inventory spending (which is not predictive of future growth), accounted for the deceleration in GDP growth from the third quarter of 2013 to the fourth, according to the BEA. Consumer spending and exports, on the other hand, grew sharply.

"In short, fairly healthy growth, despite the government shutdown at the start of the quarter," wrote High Frequency Economics' Jim O'Sullivan in response to the report.

The rate of growth for the second half of 2013, at 3.7 percent, was the strongest in years.

For all of 2013, however, real GDP growth checked in at just 1.9 percent, slower than 2012's 2.8 percent.

Slowing business investment and government spending were primarily to blame for overall growth trending down in 2013, the BEA reported.

Thursday's estimates will be updated and revised in late February.

Economic growth will fall somewhere in the range of 2.8 to 3.2 percent in 2014, according to Federal Reserve officials' projections.

View article comments Leave a comment

More from washingtonexaminer.com