The latest economic recession was brief … at least by the numbers. The U.S. Commerce Department this morning reported the gross domestic product in the fourth quarter of the year increased at a 1.7% annual rate.

This measure of the total output of the nation’s goods and services has been revised twice. First it was reported to be 0.2% and just a month ago was revised to 1.4%.
“Such large upward revisions typically occur only when economic growth has suddenly turned much higher, making the early estimates well short of the actual data as it is eventually reported,” says Newport Communications Senior Economist Jim Haughey.
News of a fourth quarter increase compares to a GDP that contracted at a 1.3% annual rate in the third quarter, while barely posting a positive return in the second quarter and a slightly better number for the first three months of 2001.
Haughey says the latest revision raised consumption slightly, boosted exports and reduced imports.
“This means that January began well above the October-December average level, assuring strong growth in the current quarter. How strong depends on how much of the quarter's demand was filled from inventory. Forecasts now range from about 2.5% to over 4%."
Also helping to drive the latest GDP number was a 6.1% increase in consumer spending, which has largely gotten credit for keeping the economy from slowing any further than it has.
The positive news about the GDP follows other positive economic news this week. On Thursday the U.S. Commerce Department reported new homes sales in February increased 5.3%, the fourth increase in the past five months, although total sales were below the pace from a year earlier.