The advance estimate of fourth quarter GDP growth was close to expectations, however two major components, net exports and inventory changes, were larger than anticipated and had opposing impacts. Slower inventory growth subtracted from GDP growth while an improvement in the trade deficit added to GDP growth. The inventory correction in the fourth quarter may have been excessive and production is expected to increase in early 2011 as inventories are lean. Stronger consumer spending in the fourth quarter was fueled by a drop in the savings rate, and disposable income will be boosted in the first quarter of 2011 by a reduction in payroll taxes. Overall GDP growth in the first half of 2011 is now estimated to be higher than previously expected.