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GDP grew 6% in 4Q 1998
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March 31, 1999: 9:27 a.m. ET
Final revision, down from 6.1%, puts growth for year at 3.9%, matching '97
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NEW YORK (CNNfn) - In case there was need for another reminder, 1998 ended on a high note for the U.S. economy, as the government confirmed Wednesday that its broadest measure of goods and services rose to record levels during the fourth quarter last year.
In its second and final revision, the Commerce Department said Wednesday that fourth-quarter GDP rose 6 percent. That's down incrementally from February's 6.1 percent revision and up from the 5.6 percent expansion originally reported.
Wednesday's number, the highest since the second quarter of 1996, confirmed the buoyancy of a domestic economy that grew last year with little inflation and despite overseas slowdowns.
"We know the economy's been strong," said Robert Brusca, chief economist at Nikko Securities.
For the full year 1998, GDP grew 3.9 percent, matching 1997's growth for the strongest annual performance since 1984, when the economy expanded 7 percent.
The GDP price deflator, a closely watched inflation gauge, was revised back up to 0.8 percent from 0.7 percent. It was the smallest quarterly gain in prices in nearly four decades, since a 0.6 percent rise in the third quarter of 1959.
The final GPD and deflator figures were close to analysts' expectations of 6.1 percent and 0.7 percent, respectively. The numbers had no apparent affect on the bond market, where the 30-year bond was recently off 4/32 to yield 5.59 percent.
Despite vigorous economic growth, corporate profits after taxes contracted for a second straight quarter by 1 percent in last year's fourth quarter. Profits for all of 1998 fell 2.2 percent to $477.7 billion -- the first year company profits declined since 1989, when they fell 4.8 percent.
Looking ahead, analysts generally forecast 1999's economy growing at a slower pace of about 3.5 percent..
Brusca said 1999 GDP will hinge upon the stock market's performance and the prospects for rising inflation, which thus far remains tame. 
-- from staff and wire reports
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Commerce Department
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