Economy perks up in fourth quarter
Consumer spending pushed growth to 3.5 percent for the final part of 2006.
The economy grew at a faster-than-expected 3.5 percent pace in the final quarter of last year as consumers ratcheted up spending despite a painful housing slump.
The snapshot of business activity was released by the Commerce Department on Wednesday.
It underscored the resilience of an economy that has managed to keep on moving despite the ill effects of the residential real-estate bust and an ailing automotive sector. The economy's performance in the October-to-December quarter, which followed two quarters of listless activity, exceeded analysts' forecasts for a 3 percent growth rate.
The economy opened 2006 on a strong note, growing at a 5.6 percent pace, the fastest pace in 2 ½ years.
But it lost steam during the spring and late summer. It grew at a 2.6 percent pace in the second quarter and then a weaker 2 percent pace in the third quarter. The fourth-quarter's rebound ended the year on a positive note.
On Wall Street, the Dow Jones industrials gained 98.38 points to close at 12,621.69.
For all of 2006, the gross domestic product increased by 3.4 percent. That was an improvement from a 3.2 percent showing in 2005, and it was the best performance in two years.
That's even more impressive considering the economy was hit by a housing slump. Investment in home building for all of last year was slashed by 4.2 percent, the most in 15 years.
GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic standing.
"Housing and autos hit the economy with their best punch, and the economy is still standing. It is dancing," said Stuart Hoffman, chief economist at PNC Financial Services Group.
In other economic news, employers' costs to hire and retain workers moderated, which could ease concerns about the development of inflation pressures. Wages and benefits rose 0.8 percent in the fourth quarter, down from a 1 percent rise in the third quarter, the Labor Department reported.
Spending on construction projects around the country dropped 0.4 percent in December, after edging up in November, mostly reflecting fallout from the housing slump, the Commerce Department said in another report.
In the GDP report, consumers spent more freely in the fourth quarter, a major factor behind the rebound in overall economic activity. Consumer spending grew at a 4.4 percent annual rate, up from a 2.8 percent pace in the third quarter and the strongest since the opening quarter of 2006.
An improvement in the nation's trade picture helped by stronger U.S. export growth also was a factor in the overall GDP boost.
For more information about buying, selling or financing Corona Real Estate, Norco Real Estate and Riverside County Real Estate visit http://www.951info.com Elite Properties and Finance and 951info.com.
Consumer spending pushed growth to 3.5 percent for the final part of 2006.
The economy grew at a faster-than-expected 3.5 percent pace in the final quarter of last year as consumers ratcheted up spending despite a painful housing slump.
The snapshot of business activity was released by the Commerce Department on Wednesday.
It underscored the resilience of an economy that has managed to keep on moving despite the ill effects of the residential real-estate bust and an ailing automotive sector. The economy's performance in the October-to-December quarter, which followed two quarters of listless activity, exceeded analysts' forecasts for a 3 percent growth rate.
The economy opened 2006 on a strong note, growing at a 5.6 percent pace, the fastest pace in 2 ½ years.
But it lost steam during the spring and late summer. It grew at a 2.6 percent pace in the second quarter and then a weaker 2 percent pace in the third quarter. The fourth-quarter's rebound ended the year on a positive note.
On Wall Street, the Dow Jones industrials gained 98.38 points to close at 12,621.69.
For all of 2006, the gross domestic product increased by 3.4 percent. That was an improvement from a 3.2 percent showing in 2005, and it was the best performance in two years.
That's even more impressive considering the economy was hit by a housing slump. Investment in home building for all of last year was slashed by 4.2 percent, the most in 15 years.
GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic standing.
"Housing and autos hit the economy with their best punch, and the economy is still standing. It is dancing," said Stuart Hoffman, chief economist at PNC Financial Services Group.
In other economic news, employers' costs to hire and retain workers moderated, which could ease concerns about the development of inflation pressures. Wages and benefits rose 0.8 percent in the fourth quarter, down from a 1 percent rise in the third quarter, the Labor Department reported.
Spending on construction projects around the country dropped 0.4 percent in December, after edging up in November, mostly reflecting fallout from the housing slump, the Commerce Department said in another report.
In the GDP report, consumers spent more freely in the fourth quarter, a major factor behind the rebound in overall economic activity. Consumer spending grew at a 4.4 percent annual rate, up from a 2.8 percent pace in the third quarter and the strongest since the opening quarter of 2006.
An improvement in the nation's trade picture helped by stronger U.S. export growth also was a factor in the overall GDP boost.
For more information about buying, selling or financing Corona Real Estate, Norco Real Estate and Riverside County Real Estate visit http://www.951info.com Elite Properties and Finance and 951info.com.
posted by Elite Properties and Finance at 9:50 AM
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