The following is the unedited transcript of the news release from the U.S. Bureau of Economic Analysis.


Real gross domestic product - the output of goods and services produced by labor and property located in the United States - increased at an annual rate of 3.5% in the fourth quarter of 2006, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0%.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, state and local government spending, and federal government spending that were partly offset by negative contributions from residential fixed investment and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP growth in the fourth quarter primarily reflected a downturn in imports and accelerations in PCE for nondurable goods, in exports, in federal government spending, and in state and local government spending that were partly offset by downturns in private inventory investment and in equipment and software and a deceleration in nonresidential structures.

Final sales of computers contributed 0.25% age point to the fourth-quarter growth in real GDP after contributing 0.07% age point to the third-quarter growth. Motor vehicle output subtracted 1.17% age points from the fourth-quarter growth in real GDP after contributing 0.76 %age point to the third-quarter growth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.1% in the fourth quarter, compared with an increase of 2.2% in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 2.3% in the fourth quarter, compared with 2.2% in the third.

Real personal consumption expenditures increased 4.4% in the fourth quarter, compared with an increase of 2.8% in the third. Durable goods increased 6.0%, compared with an increase of 6.4%. Nondurable goods increased 6.9%, compared with an increase of 1.5%. Services expenditures increased 2.9%, compared with an increase of 2.8%.

Real nonresidential fixed investment decreased 0.4% in the fourth quarter, in contrast to an increase of 10.0% in the third. Nonresidential structures increased 2.8%, compared with an increase of 15.7%. Equipment and software decreased 1.8%, in contrast to an increase of 7.7%. Real residential fixed investment decreased 19.2%, compared with a decrease of 18.7%.

Real exports of goods and services increased 10.0% in the fourth quarter, compared with an increase of 6.8% in the third. Real imports of goods and services decreased 3.2%, in contrast to an increase of 5.6%.

Real federal government consumption expenditures and gross investment increased 4.5% in the fourth quarter, compared with an increase of 1.3% in the third. National defense increased 11.9%, in contrast to a decrease of 1.2%. Nondefense decreased 9.3%, in contrast to an increase of 6.5%. Real state and local government consumption expenditures and gross investment increased 3.3%, compared with an increase of 1.9%.

The real change in private inventories subtracted 0.71% age point from the fourth-quarter change in real GDP after adding 0.06% age point to the third-quarter change. Private businesses increased inventories $35.3 billion in the fourth quarter, following increases of $55.4 billion in the third quarter and $53.7 billion in the second.

Real final sales of domestic product - GDP less change in private inventories - increased 4.2% in the fourth quarter, compared with an increase of 1.9 % in the third.

Gross domestic purchases

Real gross domestic purchases - purchases by U.S. residents of goods and services wherever produced - increased 1.7% in the fourth quarter, compared with an increase of 2.0% in the third.

Disposition of personal income

Current-dollar personal income increased $131.8 billion (4.9%) in the fourth quarter, compared with an increase of $157.2 billion (5.9%) in the third.

Personal current taxes increased $24.3 billion in the fourth quarter, compared with an increase of $5.2 billion in the third.

Disposable personal income increased $107.5 billion (4.6%) in the fourth quarter, compared with an increase of $152.1 billion (6.6%) in the third. Real disposable personal income increased 5.4 %, compared with an increase of 4.1%.

Personal outlays increased $91.8 billion (3.8%) in the fourth quarter, compared with anincrease of $133.0 billion (5.7%) in the third. Personal saving - disposable personal income less personal outlays - was a negative $96.0 billion in the fourth quarter, compared with a negative $111.7 billion in the third. The personal saving rate - saving as a %age of disposable personal income -was a negative 1.0% in the fourth quarter, compared with a negative 1.2% in the third. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods.

Current-dollar GDP