The recession ended during the fourth quarter of last year because the U.S. economy grew at a rate of 1.7% during the October-through-December period, according to Commerce Department data issued today (March 28).
The 1.7% growth rate for the gross domestic product (GDP) during the fourth quarter followed a 1.3% shrinkage during the third quarter of last year, the Commerce Department reported.
Earlier, the Commerce Department estimated that the economy grew at a 1.4% rate during the fourth quarter.
Traditionally, economists have believed that the optimal rate of GDP growth was between 3% and 4% per annum because that is the highest rate at which technological innovation allows an economy to grow without sparking inflation.
However, in recent years, Federal Reserve Chairman Alan Greenspan and some others have come to believe that productivity gains from information technology advances occurring during the 1990s may have made growth rates above 4% sustainable over the long term.