GDP grew 3.2 percent in 2013’s 4Q

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WASHINGTON (Jan. 31, 2014) — Preliminary data show that the U.S. Gross Domestic Product grew a healthy 3.2 percent in the fourth quarter of 2013, according to the latest figures from the U.S. Department of Commerce.

This compares with a growth rate of 4.1 percent in the third quarter, Commerce said in a Jan. 29 press release. Commerce said it will issue a final GDP figure Feb. 28, when data are more complete or have been further revised.

The fourth-quarter figure reflects strong performance in personal consumption, exports, nonresidential fixed investment, private inventory investment and spending from both state and local governments, the agency said.

Detracting from the GDP, however, were a large decrease in federal government spending, a downturn in residential fixed investment and an increase in imports.

State and local government spending and private inventory investment, though higher in the fourth quarter than in the third, showed a deceleration in the rate of increase, Commerce said.

Also on Jan. 29, the Federal Reserve announced it would cut its monthly purchases of mortgage-backed and longer-term Treasury securities by $10 billion, to $65 billion from the current $75 billion, beginning in February.

The Fed’s decreased purchases of government securities signifies that it believes the economy has strengthened noticeably from its nadir in late 2008, it said.

“The (Fed’s) sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help us to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery,” the agency said.

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