Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

GDP report: Economy grew at 3.1% rate in Q4

chart_gdp_032511.top.gif By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- The economy grew slightly faster at the end of 2010 than previously thought, according to a government release Friday.

Gross domestic product, the broadest measure of economic activity, was revised higher to an annual growth rate of 3.1% in the three months ending in December.

The prior estimate had been for a 2.8% growth rate in the period.

While economists don't consider the three-tenths revision a major change, the report contained new information on strong corporate profits, which could be an encouraging sign for the job market going forward.

Company profits grew 9.7% during the quarter -- about twice what economists had been expecting.

"That's impressive when you have nominal GDP growth of only 3.1%," said Joseph LaVorgna, chief U.S. economist with Deutsche Bank. "To get that kind of corporate profit growth is impressive, and a good sign for 2011."

The government said consumer spending and exports helped drive the overall number higher in the fourth quarter, while budget cuts by state and local governments continued to hold growth back.

The Commerce Department calculates GDP as a measure of goods and services produced in the United States. The number is backward looking and is often revised multiple times. This is the third reading for the fourth quarter. To top of page

Index Last Change % Change
Dow 17,773.64 -57.12 -0.32%
Nasdaq 4,775.36 -29.93 -0.62%
S&P 500 2,065.30 -10.51 -0.51%
Treasuries 1.82 -0.02 -1.03%
Data as of 9:44am ET
Company Price Change % Change
Bank of America Corp... 14.56 -0.23 -1.56%
Freeport-McMoRan Inc... 14.00 1.34 10.58%
Ford Motor Co 13.56 -0.53 -3.76%
Apple Inc 93.74 -1.09 -1.15%
Microsoft Corp 49.87 -0.03 -0.06%
Data as of Apr 29
Sponsors

Sections

The Oracle of Omaha joked that the impact on Corporate America would not be the biggest problem of a Donald Trump presidency. More

The Dow is down 300 points over the past two days, leaving the index on track for its worst week since early February. Blame fumbled earnings reports from the likes of Apple and Google as well as concerns about the Bank of Japan. More

Now you can watch the SpaceX Falcon 9 rocket land on a barge as if you were standing on the deck of the ship. More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More