Washington, DC…Real gross domestic product (GDP) increased at an annual rate of 1.9 percent in the fourth quarter of 2016 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the
third quarter, real GDP increased 3.5 percent. The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2017.

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

The deceleration in real GDP in the fourth quarter reflected a downturn in exports, an acceleration in
imports, a deceleration in PCE, and a downturn in federal government spending that were partly offset
by an upturn in residential fixed investment, an acceleration in private inventory investment, an upturn
in state and local government spending, and an acceleration in nonresidential fixed investment.

Current-dollar GDP increased 4.0 percent, or $185.5 billion, in the fourth quarter to a level of $18,860.8
billion. In the third quarter, current dollar GDP increased 5.0 percent, or $225.2 billion (table 1 and table
3).

The price index for gross domestic purchases increased 2.0 percent in the fourth quarter, compared
with an increase of 1.5 percent in the third quarter (table 4). The PCE price index increased 2.2 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.3 percent, compared with an increase of 1.7 percent (appendix table A).

Personal Income (table 10)

Current-dollar personal income increased $152.0 billion in the fourth quarter, compared with an
increase of $172.3 billion in the third. The deceleration in personal income primarily reflected a
deceleration in wages and salaries.

Disposable personal income increased $130.2 billion, or 3.7 percent, in the fourth quarter, compared
with an increase of $141.5 billion, or 4.1 percent, in the third. Real disposable personal income
increased 1.5 percent, compared with an increase of 2.6 percent.

Personal saving was $791.2 billion in the fourth quarter, compared with $818.1 billion in the third. The
personal saving rate — personal saving as a percentage of disposable personal income — was 5.6 percent
in the fourth quarter, compared with 5.8 percent in the third.

2016 GDP

Real GDP increased 1.6 percent in 2016 (that is, from the 2015 annual level to the 2016 annual
level), compared with an increase of 2.6 percent in 2015 (table 1).

The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed
investment, state and local government spending, exports, and federal government spending that were
partly offset by negative contributions from private inventory investment and nonresidential fixed
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP from 2015 to 2016 reflected a downturn in private inventory
investment, a deceleration in PCE, a downturn in nonresidential fixed investment, and decelerations in
residential fixed investment and in state and local government spending that were offset by a
deceleration in imports and accelerations in federal government spending and in exports.

Current-dollar GDP increased 2.9 percent, or $530.3 billion, in 2016 to a level of $18,566.9
billion, compared with an increase of 3.7 percent, or $643.5 billion, in 2015 (table 1 and table 3).

The price index for gross domestic purchases increased 1.0 percent in 2016, compared with an
increase of 0.4 percent in 2015 (table 4).

During 2016 (that is, measured from the fourth quarter of 2015 to the fourth quarter of 2016),
real GDP increased 1.9 percent, the same rate as during 2015. The price index for gross domestic
purchases increased 1.5 percent during 2016, compared with an increase of 0.4 percent during 2015
(table 7).

Source Data for the Advance Estimate

Information on the assumptions used for unavailable source data in the advance estimate is
provided in a Technical Note that is posted with the news release on BEA’s Web site. Within a few days
after the release, a detailed “Key Source Data and Assumptions” file is posted on the Web site. For
information on updates to GDP, see the “Additional Information” section that follows.

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Next release: February 28, 2017 at 8:30 A.M. EST
Gross Domestic Product: Fourth Quarter and Annual 2016 (Second Estimate)