GDP Growth Accelerates to 2%
The U.S. gross domestic product, which measures the production of goods and services within the U.S. economy, grew at a 2% annual rate during the third quarter, according to advance estimates released this morning by the Commerce Department's Bureau of Economic Analysis. The figure, which reflects inflation-adjusted values, was slightly above the 1.9% consensus figure among economists, and marked an acceleration in growth from the 1.2% GDP growth during the second quarter.
In its release of highlights from the report, the BEA pointed to several strong areas of growth. Consumer spending rose, with spending on motor vehicles and other durable goods showing a marked increase. Spending from the federal government also boosted GDP, with defense spending rebounding after a decline in the second quarter. Residential housing investment also saw an increase.
Pulling growth back was a decline in business investment, with slowing investment in software and equipment and an outright decrease in spending on commercial buildings and other nonresidential structures. The summer drought across much of the U.S. also had a negative impact on farm inventories.
Of some concern as well was a big jump in the chain deflator, which the BEA uses to adjust raw dollar-figure data for inflation. The figure rose to 2.8% during the third quarter, up from 1.6% in the previous quarter.
Along with GDP figures, the BEA also announced that personal spending rose at a 4% pace in the third quarter, double the rate of the second quarter. Combined with a slower increase in disposable personal income of just 2.6%, the nation's savings rate fell to 3.7%, compared to 4% in the previous quarter.
The BEA will release an updated estimate of third-quarter GDP on Nov. 29, with a final revision coming near the end of December.
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