The economy is on an upward trajectory, with the Bureau of Economic Analysis reporting real gross domestic product increased at an annual rate of 3.5 percent in the third quarter of this year, up from 1.4 percent in the second quarter. On a quarter-over-quarter basis, that growth was 4.8 percent.
The Bureau of Economic Analysis said in a press release Thursday (Dec. 22) that the GDP estimate for the third quarter is based on more complete data that was available when it issued an estimate last month. In the second estimate in November, the increase in GDP was 3.2 percent, lower than what it reported for the third quarter on Thursday. The government agency said, with the third estimate for the third quarter, it found nonresidential fixed investment, personal consumption expenditures (PCE) and state and local government spending increased more than previously estimated. Nevertheless, it said the general picture of economic growth remains the same.
On a sequential basis, the Bureau of Economic Analysis found real gross domestic income (GDI) increased 4.8 percent in the third quarter, compared with an increase of 0.7 percent in the second. The increase in real GDP in the third quarter is due largely to contributions from personal consumption expenditures, exports, private inventory investment, nonresidential fixed investment and federal government spending. It was partly offset by negative contributions from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased, noted the government agency.
Current-dollar GDP increased 5 percent, or $225.2 billion, in the third quarter to a level of $18,675.3 billion. In the second quarter, current dollar GDP increased 3.7 percent, or $168.5 billion. Meanwhile, the price index for gross domestic purchases increased 1.5 percent in the third quarter. That compares to an increase of 2.1 percent in the second quarter, while the personal consumption expenditures price index increased 1.5 percent compared with an increase of 2 percent in the previous quarter. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.