Final GDP Reading Disappoints

The economy grew at a slower pace than economists expected according to government data released Friday.

The Commerce Department said its final reading for Gross Domestic Product in the fourth quarter was 5.6%, lower than the 5.9% pace that was estimated in February. In the third quarter GDP increased at a 2.2% pace.

Growth in corporate profits slowed to 6.5% in the fourth quarter, down from 12.7% in the third quarter. The market was expecting corporate profits to rise 10%. The sharp rise in corporate profits has helped bolster earnings at companies such as Intel (NYSE: INTC) and Apple (NASDAQ: AAPL) even as unemployment has remained near 10%.

Much of the economy's recent growth is due to government stimulus spending and business inventory restocking. Excluding inventories the economy grew by 1.7%.

For 2009 GDP declined by 2.4%, the biggest drop since 1946 according to The Commerce Department.