GDP Grows at Fastest Pace in Six Years in Q4

Washington, DC, Jan. 29, 2010--The U.S. economy grew at the fastest pace in six years during the fourth quarter of 2009, according to data released Friday by the Commerce Department.

Real gross domestic product increased at a 5.7% seasonally-adjusted annual rate in the final three months of the year, the best quarterly growth since late 2003, the government estimated. The economy grew 2.2% in the third quarter.

The 5.7% increase was higher than the 5.4% gain expected by economists. The figures are subject to large revisions in coming months.

Even with growth in the second half of the year, the economy shrank 2.4% in 2009, the worst year for GDP since the 10.9% drop in 1946.

In the fourth quarter of 2009, about two-thirds of the growth came via the swing in inventories. Excluding the change in inventories, final sales increased at a 2.2% annual rate, a signal that the economy remained weak despite stellar topline numbers.

Consumer spending increased at a 2% annual rate.

Business investment grew at a 2.9% annual rate, the first increase since the spring of 2008. Investments in equipment and software increased at a 13.3% annual rate, but investments in structures plunged at a 15.4% pace.

Investments in homes increased at a 5.7% pace, the second straight increase after 14 consecutive declines.

Foreign trade added to growth as well, with exports of goods increasing at a 28.1% annual rate, the best in 30 years.

Government spending fell at a 0.2% annual rate.