• Home
  • Contact Us!
  • Privacy Policy

Radio Metta

  • Home
  • Business
  • Education
  • Health
  • Home Deco
  • News
  • Real Estate
  • Technology
  • Contact Us!
  • Privacy Policy
Home» Business»Fourth-quarter GDP revised up; corporate profits fall

Fourth-quarter GDP revised up; corporate profits fall

Saheli 27 Mar 2016 Business Comments Off on Fourth-quarter GDP revised up; corporate profits fall 375 Views

U.S. economic growth slowed in the fourth quarter, but not as sharply as previously estimated, with fairly strong consumer spending offsetting the drag from efforts by businesses to reduce an inventory overhang.

Gross domestic product increased at a 1.4 percent annual rate instead of the previously reported 1.0 percent pace, the Commerce Department said on Friday in its third GDP estimate.

GDP growth was initially estimated to have risen at only a 0.7 percent rate. The economy grew at a rate of 2.0 percent in the third quarter and expanded 2.4 percent for all of 2015.

Economists polled by Reuters had expected that fourth-quarter GDP growth would be unrevised at a 1.0 percent rate.

Chevrolet Malibu manufacturing production factory

Dave Kaup |

The upward revisions reflected a stronger pace of consumer spending than previously estimated.

Consumer spending, which accounts for more than two thirds of U.S. economic activity, rose at a 2.4 percent pace rather than the 2.0 percent rate reported last month. That reflected more consumption of services than previously estimated.

The fairly solid pace of consumer spending underscores the economy’s underlying strength and should further allay fears of a recession, which triggered a massive stock market sell-off early this year.

Spending is being supported by a tightening labor market, which is steadily lifting wages, and rising house prices.

Gasoline prices around $2 per gallon are also helping to underpin household discretionary spending.

Inventory investment was revised lower. Still, inventories remain high relative to domestic demand.

Businesses accumulated $78.3 billion worth of inventory rather than the $81.7 billion reported last month. As a result, inventories subtracted 0.22 percentage point from GDP growth instead of the previously reported 0.14 percentage point.

First-quarter GDP growth estimates are around a 1.5 percent rate. But with the inventory pile still large and shipments of capital goods ordered by businesses weak in January and February, the risks to growth are tilted to the downside.

There was some bad news in the GDP report, with corporate profits falling for a second straight quarter as a strong dollar and cheap oil undercut the earnings of multi-national companies.

Profits after tax with inventory valuation and capital consumption adjustments declined at an annual rate of 8.4 percent, the biggest drop since the first quarter of 2014, after dropping at a 1.7 percent pace in the third quarter.

Profits from current production fell $159.6 billion after decreasing $33.0 billion in the third quarter.

For all of 2015 profits dropped 5.1 percent, the largest drop since 2008, after slipping 0.6 percent in 2014.

Part of the drop in profits in the fourth quarter was due to a $20.8 billion transfer payment related to the BP oil spill in the Gulf of Mexico in 2010, which was the largest U.S. offshore oil spill.

Profits from the rest of the world decreased $6.5 billion in the final three months of 2015 after sliding $23.1 billion in the third quarter.

Manufacturing profits declined $139.2 billion during the last quarter after decreasing by $4.1 billion in the July-September period. Profits in the petroleum and coal products sector tumbled $124.3 billion after rising $7.0 billion in the third quarter.

The dollar gained 10.5 percent last year versus the currencies of the United States’ main trading partners, putting a squeeze on the profits of multinationals such asProcter & Gamble and Colgate-Palmolive.

A more than 60 percent plunge in crude oil prices from highs above $100 a barrel in June 2014 has also hurt the profits of oilfield service firms like Schlumberger andHalliburton.

But with the dollar’s appreciation slowing since the start of the year and the oil price slide ebbing, corporate profits are poised to rise, helping to underpin job growth.

[Source:- CNBC ]

corporate fall Fourth-quarter GDP Profits revised up 2016-03-27
Tags corporate fall Fourth-quarter GDP Profits revised up
Facebook Twitter Stumble linkedin Pinterest More

Authors

Posted by : Saheli
Previous Article :

Real estate’s ticking bomb: Who gets hurt

Next Article :

How Facebook, Twitter connected after Brussels attack

Related Articles

Step up: Tips for organizations from the FTC’s settlement with Genshin Effect designer HoYoverse

Step up: Tips for organizations from the FTC’s settlement with Genshin Effect designer HoYoverse

admin 07 Feb 2025
The main 3 showcasing challenges for independent companies (and how mechanization can tackle them)

The main 3 showcasing challenges for independent companies (and how mechanization can tackle them)

admin 24 Sep 2024
The most effective method to Begin a Blog (and Bring in Cash) in 6 Stages: Simple Fledgling’s Aide

The most effective method to Begin a Blog (and Bring in Cash) in 6 Stages: Simple Fledgling’s Aide

admin 19 Sep 2024

Latest Post

Anatomy, Function, and Common Injuries of Hamstring Muscles
Health

Anatomy, Function, and Common Injuries of Hamstring Muscles

admin 12 Aug 2025
Gaming Your Way to Sharper AI Prompts
Technology

Gaming Your Way to Sharper AI Prompts

admin 07 Aug 2025
15 Elegant Living Room Hanging Lights
Home Deco

15 Elegant Living Room Hanging Lights

admin 04 Aug 2025
115 Ideas for Real Estate Blogs: How to Make the Most of Your Online Presence and Get Leads
Real Estate

115 Ideas for Real Estate Blogs: How to Make the Most of Your Online Presence and Get Leads

admin 02 Aug 2025
Quitting vaping: the health reasons why you should give up vaping
Health

Quitting vaping: the health reasons why you should give up vaping

admin 30 Jul 2025
5 tips for getting started with Flow
Uncategorized

5 tips for getting started with Flow

admin 26 Jun 2025
Acidity Problems?  21 Home Remedies That Can Be Beneficial
Health

Acidity Problems? 21 Home Remedies That Can Be Beneficial

admin 06 Jun 2025
August 2025
M T W T F S S
 123
45678910
11121314151617
18192021222324
25262728293031
« Jul    
  • Home
  • Contact Us!
  • Privacy Policy
Copyright 2016, All Rights Reserved
Magazine Blog News WordPress Theme