Cross Timbers Business Report, Volume 19, Number 2, Winter 2006 Page: 1
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Cross Timbers Business Report
Published by the College of Business Administration, Tarleton State University
Articles by Members of Delta Mu Delta, William L. Beaty and Elizabeth Cowles, Editors
Volume 19, No.2
Fourth-Quarter Output Growth Drops Sharply
By William L. Beaty
A dramatic slowdown in consumer durable spending
contributed to a sharp deceleration in the nation's output
growth during the fourth quarter, according to a recent re-
port from the Department of Commerce. Weakness or out-
right declines in other sectors failed to offset this pattern, as
the economy grew at its slowest rate in three years.
Real gross domestic product (GDP) the inflation-
adjusted measure of the nation's output of goods and ser-
vices grew at an anemic 1.1 percent annual rate in 2005's
final quarter. This expansion falls far below the 4.1 and 3.3
Changes in Real GDP
Annual Percentage Rates
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Source: Bureau of Economic Analysis, U. S. Department of Commerce
percent growth rates recorded in the third and second pe-
Weak automobile sales contributed to a 17.5 percent
drop in durable goods purchases during last year's final
three months. Expansions of 5.1 percent and 3.2 percent
in durable good and service expenditures only offset part
of this decline, resulting in only a 1.1 percent growth in
consumer spending during the fourth quarter. This expan-
sion reflects the weakest growth rate since the second
quarter of 2001.
Led by a substantial rise in inventories, business in-
vestment rose at a healthy 12.2 percent rate during last
year's final period. This advance compares favorably to
the 5.3 percent expansion in the third quarter and the 3.7
percent decline noted in the second quarter.
Net exports acted as a brake on economic growth be-
tween October and December as a 2.4 percent advance in
exports failed to offset a 9.1 percent surge in imports.
Governmental outlays also pulled output growth lower, as
a weak 0.4 percent rise in state and local outlays fell short
of the 7.0 percent drop in federal government purchases.
The Department of Commerce collects and reports
national output data on a quarterly basis. This preliminary
report will be revised twice before being posted as a final
Unemployment Picture Improves
By Lindsay Morrison
The last quarter of 2005 showed a decrease in unem-
ployment rates in the United States, Texas, and Erath Coun-
ty. In October and November, the U.S. rate was steady at 5
percent, and then declined to 4.9 percent in December.
That value is down from the December 2004 rate of 5.4
percent. The average unemployment rate of 5.1 percent for
2005 is significantly lower than the rate of 5.5 percent esti-
mate for 2004.
The jobless patterns in Texas mirrored those of the
U.S, with a steady rate of 5.3 percent in October and No-
vember, then a decrease to 5.1 percent in December. Texas
has gained over 153,000 jobs in the past year. The average
rate of unemployment for 2005 is 5.4 percent, which is
lower than 2004's average of 5.9 percent.
Locally, counties in the Cross Timbers area continue to
see unemployment rates that are lower than the national and
state averages. Also, all of their annual average rates have
dropped compared to 2004's values. Looking at the last
4 .U. S.
3 Erath Co.
Oct Dec Feb Apr Jun Aug Oct Dec
Source: U.S. Bureau of Labor Statistics and Texas Workforce Commission
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Tarleton State University. College of Business Administration. Cross Timbers Business Report, Volume 19, Number 2, Winter 2006, periodical, Winter 2006; Stephenville, Texas. (texashistory.unt.edu/ark:/67531/metapth284670/m1/1/: accessed November 25, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Tarleton State University.