INITIAL U.S. GDP FIGURES SHOW 3.4% GAIN IN 2006

The Commerce Department released its initial fourth quarter gross domestic product figures this morning showing a 3.5% seasonally adjusted annualized growth rate for October through December of 2006. That bested a 2% growth in the third quarter and put the initial 2006 GDP growth at 3.4%, compared to 3.2% in 2005 and 3.9% in 2004.

A closer look at the data released shows that an important inflationary statistic, personal consumption expenditures (PCE), actually declined in the fourth quarter at an annual rate of 0.8%, the biggest drop since 1954 and the first since 1961.

From USA Today:

Excluding volatile food and energy prices, the so-called core PCE index was
up at a 2.1% annual rate, still slightly above the Fed's assumed comfort range
of 1% to 2%. Economists were expecting the core PCE index to advance 2.2%.

WSJ.com