Inventory Accumulation Boosts Real GDP Growth in the Fourth Quarter

Real gross domestic product increased at a 6.9 percent annualized rate in the fourth quarter, up from a 2.3 percent pace in the third quarter. Over the past four quarters, real gross domestic product is up 5.5 percent, putting the level slightly above trend (see first chart).

Real final sales to private domestic purchasers, a key measure of private domestic demand, rose at a more modest 2.8 percent annualized rate in the fourth quarter following a 1.4 percent pace in the third quarter. Over the last four quarters, real final sales to private domestic purchasers are up 6.4 percent, keeping the level slightly above trend (see first chart). The trend growth in real final sales to private domestic purchasers is 2.6 percent since mid-2009.