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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,757.91 138.40 0.79%
Nasdaq 5,013.12 26.25 0.53%
S&P 500 2,077.42 14.31 0.69%
Treasuries 2.42 0.08 3.55%
Data as of 7:47pm ET
Company Price Change % Change
Bank of America Corp... 17.22 0.20 1.18%
AT&T Inc 35.57 0.05 0.14%
Ford Motor Co 14.99 -0.02 -0.13%
Delta Air Lines Inc 40.27 -0.81 -1.97%
General Electric Co 26.66 0.09 0.34%
Data as of 4:04pm ET
Sponsors

Sections

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

Starting Wednesday, the Department of Education will make sure students don't take on more debt than they can handle by holding schools accountable for the return on investment of their degree programs. More