US GDP Growth Unrevised at 2.1% in Q3
The US economy grew by an annualized 2.1% in Q3, unchanged from the second estimate and following a 2% expansion in the previous three-month period. Consumer spending grew faster than anticipated and the drag from business investment was smaller than earlier reported. On the other hand, imports rose faster and inventories fell while investment in homebuilding was revised lower.
Personal consumption expenditures (PCE) made the biggest contribution to growth (2.12 percentage points vs 1.97 percentage points in the second estimate) and rose 3.2 percent (2.9 percent in the second estimate). It was boosted by spending on goods (5.3 percent vs 5.7 percent in the second estimate), namely durable goods (8.1 percent vs 8.3 percent), nondurables (3.9 percent vs 4.3 percent) and services (2.2 percent vs 1.7 percent). Also, federal government spending added 0.22 percentage points to growth (the same as in the second estimate) and advanced 3.3 percent (3.4 percent in the second estimate); state and local government spending added 0.08 percentage points to growth (0.06 percentage points) and rose 0.7 percent (vs 0.5 percent in the second estimate).
On the other hand, private inventories weighed on the growth (-0.03 percentage points compared to +0.17 percentage points in the second estimate). Inventories increased at a $69.4 billion pace instead of the $79.8 billion pace earlier reported.
Fixed investment was a drag on growth (-0.14 percentage points vs -0.18 percentage points in the second estimate) as it shrank 0.8 percent (vs -1 percent), mainly due to structures (-9.9 percent vs -12 percent), and equipment (-3.8 percent, the same as in the previous estimate). Business investment dropped 2.3 percent, compared to a 2.7 percent fall previously reported. In contrast, investment in intellectual property products rose (4.7 percent vs 5.1 percent) and residential one rebounded (4.6 percent compared to 5.1 percent in the previous release). Also, net external demand weighed down on growth for the second straight quarter (-0.14 percentage points vs -0.11 percentage points in the second estimate): exports rose 1 percent (vs 0.9 percent in the second estimate) and imports increased 1.8 percent (vs 1.5 percent).
The price index for gross domestic purchases increased 1.4 percent in the third quarter, compared with an increase of 2.2 percent in the second quarter. The PCE price index increased 1.5 percent, compared with an increase of 2.4 percent. Excluding food and energy prices, the PCE price index increased 2.1 percent, compared with an increase of 1.9 percent.
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