Downward revision for US economic growth

US economic growth has been revised
down to an annualised rate of 5.6 per cent for the fourth quarter of 2009,
official figures show.

This is the rate of economic growth
for the three months that assumes the same level for a full 12 months.

It was revised down from 5.9 per
cent, in the US Commerce Department’s third estimate of fourth-quarter GDP.

The main factors behind the
revision were weaker personal and government consumption, and lower investment.

The figure is significantly up on
the 2.2 per cent annualised rate of growth seen in the third quarter and is the
strongest reported since the third quarter of 2003.

The Commerce Department said that
the acceleration in inflation-adjusted growth or “real GDP” was
chiefly due to a slowdown in the rate at which business drew down on its
inventories. But there were other factors.

“The pickup in real GDP also
reflects rebounds in business investment in equipment and software and in net
exports,” the Commerce Department said.

There was muted response to the
revision on the US markets however.

Half way through trading on Friday,
New York’s Dow Jones Industrial Average was up just 8 points, or 0.07 per cent,
while the broader S&P 500 was almost unchanged.