By MacKenzie C. Babb
IIP Staff Writer
January 27, 2012
The U.S. economy grew by 2.8 percent from October to December, marking the 10th straight quarter of positive growth and bringing expansion of the country’s gross domestic product up to 1.7 percent for 2011, according to the Commerce Department.
The department’s Bureau of Economic Analysis released its advance estimate of U.S. gross domestic product (GDP) gains January 27. The GDP, which measures a country’s total output of goods and services, serves as a primary indicator of economic health.
“Today’s report is another indication that our economy is moving in the right direction and we are gaining strength,” Commerce Secretary John Bryson said.
White House Council of Economic Advisers Chairman Alan Krueger said that although the report showed progress, much work is still needed to get the U.S. economy back on track.
“While the continued expansion is encouraging, faster growth is needed to replace the jobs lost in the recent downturn and to reduce long-term unemployment,” Krueger said in a January 27 statement.
He said the increase in GDP reflects positive contributions from private inventory investment, personal consumption expenditures, residential fixed investment and nonresidential investment.
Exports of goods and services grew by 4.7 percent during the three-month period, adding significantly to the growth.
Counting against growth in calculating the GDP was a 4.4 percent rise in goods and services imports. Overall government purchases also fell by 4.6 percent, with substantial declines in federal defense spending (12.5 percent) and state and local government spending (2.6 percent).
Bryson said the United States must “remain focused on the elements of an economy built to last,” a reference to the economic blueprint announced by President Obama during his State of the Union address to Congress January 24. The new plan calls for the country to build a forward-looking economy based on manufacturing, energy, and education and training for American workers.
The GDP figures for the October to December period, as well as for the whole of 2011, will be revised based on new data and released February 29, according to the Commerce Department. A second revision will come out March 29.
The advance report came days after Federal Reserve Chairman Ben Bernanke said the U.S. economy is continuing to expand despite some slowing in global growth. He told reporters January 25 that the Federal Open Market Committee, the central bank’s policymaking arm, projects U.S. gross domestic product to continue to grow moderately during coming quarters, reaching between 2.2 percent and 2.7 percent for 2012.