The growth rate of the economy continued to increase in the final quarter of 2010, a further sign that the economy continues to gain momentum as it recovers from the worst recession since the Great Depression, Austan Goolsbee, chairman of the Council of Economic Advisers, stated today. (For a copy of the complete address click here.)
Real GDP, the total amount of goods and services produced in the country, grew at a 3.2% annual rate in the fourth quarter of last year, the sixth straight quarter of positive growth. For 2010 as a whole, GDP rose 2.9%, the fastest since 2005 and a dramatic reversal compared with the -2.6% rate in 2009.
Private forecasters have predicted that the tax cut package signed by the president in December will have a significant impact on economic growth this year.
Some key components of GDP continued to expand in the fourth quarter, including exports (8.5%), consumer spending (4.4%), equipment and software investment (5.8 %), and residential spending (3.4%). Government spending fell 0.6%. Consumption and net exports made the largest positive contributions to growth this quarter, while the decline in inventory investment subtracted substantially from GDP growth.