Disappointing growth in fourth quarter 2004 GDP sends My Bush Boom into hiding.
The American economy’s expansion slowed somewhat in the last three months of the year, the government reported today, as the nation’s widening trade gap took a growing toll on growth.
The Commerce Department, in its initial estimate, said the nation’s gross domestic product – its total output of goods and services – rose at an annual rate of 3.1 percent in the fourth quarter of 2004, less than the 3.5 percent that many economists had been expecting. In the third quarter, the economy grew at an annual rate of 4 percent.
Officials at the Commerce Department said that the biggest factor in the slowdown in the fourth quarter was the record trade deficit. “We had less exports and we had more imports,” said Carol Moylan, the chief of the national investment and wealth division of the Bureau of Economic Analysis, which prepared today’s report.
Imports jumped by 9 percent in the fourth quarter, an acceleration from an increase of 4.6 percent in the third quarter, while exports fell by 3.9 percent in the fourth quarter, in contrast to a rise of 6 percent in the quarter before.
Today’s report included two figures for the year’s overall economic growth, calculated in two different ways. By one measure – averaging the annual growth rates reported for each of the four quarters – the gross domestic product rose by 4.4 percent last year, the biggest increase since 1999. The growth rate calculated in this manner was 3 percent in 2003.
The other method compares the size of the economy now against its size a year earlier. By that measure, which many economists feel gives a more accurate picture of economic trends, the economy grew by only 3.7 percent between the fourth quarter of 2003 and the fourth quarter of 2004 – less than it had grown between the end of 2003 and the end of 2002.