While the Commerce Department's final report on fourth quarter gross domestic product showed that the economy contracted a little faster than previously estimated, the revised drop in GDP was not quite as steep as economists had been expecting.
The report released on Thursday showed that GDP fell by a revised 6.3 percent in the fourth quarter compared to the preliminary estimate of a 6.2 percent decrease. Economists had been expecting GDP to be revised to show a somewhat steeper 6.6 percent contraction.
With the downward revision, the contraction in the fourth quarter still marked the weakest quarter since a 6.4 percent decrease in GDP in the first quarter of 1982. However, with only a week left in the first quarter, the data is likely to be viewed as old news.
Downward revisions to private inventory investment, exports of services, and non-residential structures contributed to the modest downward revision to the pace of contraction.
At the same time, the downward revisions were partly offset by an upward revision to the exports of goods and a downward revision to imports of services, with imports acting as a subtraction in the calculation of GDP.
The revised decrease in fourth quarter GDP still marks a notable acceleration in the pace of contraction compared to the 0.5 percent decrease seen in the third quarter.
Most of the major GDP components contributed to the faster pace of contraction, according to the Commerce Department, with a downturn in exports and a much larger decrease in equipment and software spending serving as the largest contributors.
However, the weakness was partly offset by a much larger decrease in imports. Imports fell by a revised 17.5 percent in the fourth quarter following a 3.5 percent decrease in the third quarter.
The report also showed that consumer spending fell 4.3 percent in the fourth quarter, which was unchanged from the previous estimate. The decrease still reflects an acceleration compared to the 3.8 percent decrease that was seen in the previous quarter.
The Commerce Department also said that its closely watched reading on core consumer prices, which exclude food and energy prices, edged up 0.9 percent in the fourth quarter following a 2.4 percent increase in the third quarter.
In other economic news, the Labor Department said that initial jobless claims in the week ended March 21st rose to 652,000 from the previous week's revised figure of 644,000. Economists had expected claims to rise to 650,000 from the 646,000 originally reported for the previous week.
The report also showed that continuing claims in the week ended March 14th rose to another new record high of 5.560 million from the preceding week's revised level of 5.438 million.
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