Breaking: US economy grows at an annual rate of 2.9% in Q4 vs. 2.6% expected

The US economy expanded at an annualized rate of 2.9% in the fourth quarter, the US Bureau of Economic Analysis' (BEA) first estimate showed on Thursday. 

This reading followed the 3.2% growth recorded in the third quarter and came in slightly better than the market expectation for an expansion of 2.6%.

"The increase in real GDP reflected increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and exports," the BEA explained in its publication. "Imports, which are a subtraction in the calculation of GDP, decreased."

Market reaction

With the initial market reaction, the US Dollar gathered strength against its rivals and the US Dollar Index turned positive on the day near 102.00. Additionally, the benchmark 10-year US Treasury bond yield extended its daily rebound and was last seen rising nearly 2% on the day at 3.51%.

Related content

• Stay updated on the latest US GDP data by visiting our economic calendar event page. 
• To understand more about GDP and its impact on the economy, visit our macroeconomics topic page. 
• For latest developments on this GDP print release check out our latest news page.

About US Gross Domestic Product

The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for equities, while a low reading is negative.