Economic Growth Drops to 3.2% in 4th Quarter
The Commerce Department reported Thursday that GDP growth dropped to 3.2% in the 4th Quarter. While generally a healthy number, it is a dramatic drop from 3rd Quarter growth, which was 4.1% on an annualized basis.
For the entire year, GDP grew a modest 1.9% in 2013. This is slower than growth in 2012, which was 2.8% for the year.
The increase in the 4th Quarter was largely driven by higher consumer spending. Personal spending, in fact, accounted for more than half of the growth. This helped overcome a worrying drop in fixed investment. Another worry was the drop in personal savings rate, which dropped 14% from the 3rd Quarter to 4.3%.
The decline in savings suggests a consumer pull-back early this year.