U.S. Economy Grows Faster Than Expected in Q3


Real gross domestic product in the United States increased at an annual rate of 2.8 percent in the third quarter of 2013, according to the "advance" estimate released by the Bureau of Economic Analysis. While change in inventories was the main source of expansion, consumer and business spending growth slowed sharply.


The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

Real personal consumption expenditures increased 1.5 percent in the third quarter, compared with an increase of 1.8 percent in the second.  Durable goods increased 7.8 percent, compared with an increase of 6.2 percent.  Nondurable goods increased 2.7 percent, compared with an increase of 1.6 percent. Services increased 0.1 percent, compared with an increase of 1.2 percent.

Real nonresidential fixed investment increased 1.6 percent in the third quarter, compared with an increase of 4.7 percent in the second.  Nonresidential structures increased 12.3 percent, compared with an increase of 17.6 percent.  Equipment decreased 3.7 percent, in contrast to an increase of 3.3 percent. Intellectual property products increased 2.2 percent, in contrast to a decrease of 1.5 percent. Real residential fixed investment increased 14.6 percent, compared with an increase of 14.2 percent.

Real exports of goods and services increased 4.5 percent in the third quarter, compared with an increase of 8.0 percent in the second.  Real imports of goods and services increased 1.9 percent, compared with an increase of 6.9 percent.

Real federal government consumption expenditures and gross investment decreased 1.7 percent in the third quarter, compared with a decrease of 1.6 percent in the second.  National defense decreased 0.7 percent, compared with a decrease of 0.6 percent.  Nondefense decreased 3.3 percent, compared with a decrease of 3.1 percent.  Real state and local government consumption expenditures and gross investment increased 1.5 percent, compared with an increase of 0.4 percent.

The change in real private inventories added 0.83 percentage point to the third-quarter change in real GDP after adding 0.41 percentage point to the second-quarter change.  Private businesses increased inventories $86.0 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first.

Bureau of Economic Analysis | anna@tradingeconomics.com
11/7/2013 1:47:01 PM