US GDP Growth Revised Down to 3.4% in Q3


The US economy advanced an annualized 3.4 percent on quarter in the third quarter of 2018, slightly below earlier estimates of a 3.5 percent growth, final figures showed. It follows a 4.2 percent expansion in the previous period which was the highest since the third quarter of 2014. Personal spending was revised slightly lower and net trade dragged down more on growth than initially estimated while inventory accumulation was higher than expected.

Personal consumption expenditure (PCE) contributed 2.37 percentage points to growth (2.45 percentage points in the second estimate) and rose 3.5 percent (3.6 percent in the second estimate). Spending rose less than expected for both durable (3.7 percent compared to 3.9 percent) and nondurable goods (4.6 percent compared to 5.3 percent) but increased slightly more for services (3.2 percent compared to 3.1 percent). 

Fixed investment made a smaller contribution (0.21 percentage points compared to 0.25 percentage points in the second estimate) and rose 1.1 percent (1.4 percent in the second estimate). Investment rose less for equipment (3.4 percent compared to 3.5 percent) and declined faster for structures (-3.4 percent compared to -1.7 percent) and residential investment (-3.6 percent compared to -2.6 percent). On the other hand, it increased more for intellectual property products (5.6 percent compared to 4.3 percent).

The contribution from private inventories was more positive than previously expected (2.33 percentage points compared to 2.27 percentage points in the second estimate).

Exports fell 4.9 percent (-4.4 percent in the second estimate), mainly due to a decline in soybean exports to China after Beijing's tariffs took effect. Imports rose 9.3 percent (9.2 percent in the second estimate), before US import tariffs take complete effect. As a result, the impact from trade was -1.99 percent, compared to -1.91 percent in the advance estimate, the biggest drag on growth since the first quarter of 1984.

Government spending and investment added 0.44 percentage points to growth, the same as in the second estimate. It increased 2.6 percent, also unchanged from the previous estimate. 

US GDP Growth Revised Down to 3.4% in Q3


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
12/21/2018 2:18:12 PM