GDP Falls to 1.5 Percent for Third Quarter

Real GDP for the third quarter grew at an annual rate of 1.5 percent according to the Bureau of Economic Analysis’s “advance” estimate. In the second quarter, real GDP increased 3.9 percent. The third quarter’s slower growth reflected sharp declines in inventory investment as well as decelerations in exports, fixed investment, consumption, and government spending.

Consumption was the largest contributor to GDP, accounting for 2.19 percent of GDP growth, down from 2.42 percent in the second quarter, as spending growth for both goods and services slowed during the third quarter.

Inventories were the largest drag on GDP, subtracting 1.44 percent from growth, after adding 0.02 percent in the second quarter. Net exports were also a drag, contributing a negative 0.03 percent, compared to a positive contribution last quarter.

Government expenditures contributed 0.30 percent to GDP, down from 0.46 percent in last quarter, as growth in national defense and state and local spending fell in the third quarter.

Read the BEA release.