Date: December 21, 2018
The U.S. Bureau of Economic Analysis indicated that, “the third estimate of real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018. In the second quarter, real GDP increased 4.2 percent.”
The increase in real GDP, for the second estimate, was 3.5 percent. For the third quarter, personal consumption expenditures (PCE) and exports were revised down while private inventory investment was revised upwards. Nonetheless, the general picture of economic growth remains the same.
“Real gross domestic income (GDI) increased 4.3 percent in the third quarter compared with an increase of 0.9 percent in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weighs GDP and GDI, increased 3.8 percent in the third quarter, compared with an increase of 2.5 percent in the second quarter,” as was stated by the BEA.
For the third quarter, the increase in real GDP reflected positive contributions from PCE, private inventory investment, non-residential fixed investment, federal government spending and state and local government spending which was partly offset by negative contributions from exports and residential fixed investment. Also, there was an increase in imports.
Whereas, for the third quarter, the deceleration in real GDP growth reflected a decline in exports and deceleration in non-residential fixed investment and in PCE. After declining in the second quarter, imports went up for the following quarter which were partly offset by an upward movement in private inventory investment.
“Current dollar GDP increased 4.9 percent, or $246.3 billion, in the third quarter to a level of $20.66 trillion. In the second quarter, current dollar GDP increased 7.6 percent, or $370.9 billion,” as reported by the BEA.
Additionally, there was a 1.8 percent increase in the price index for gross domestic purchases, in the third quarter, when compared to a 2.4 percent increase in the second quarter. The PCE price index increased 1.6 percent compared with an increase of 2 percent. Furthermore, excluding food and energy prices, there was a 1.6 percent increase in the PCE price index, compared with an increase of 2.1 percent.
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