Real GDP Increases 2.0% for the Third Quarter

Real GDP increased at a seasonally adjusted annual rate of 2.0% during the third quarter of 2021, according to the Bureau of Economic Analysis’s “advance” estimate. Real GDP increased 6.7% in the second quarter of 2021.

Real GDP increase in the third quarter was a result of increases in private inventory investment, personal consumption expenditures (PCE), state and local government spending, and nonresidential fixed investment. This was partially offset by decreases in residential fixed investment, federal government spending, and exports.

Consumption added 1.09 percentage points (pp) to growth, this follows a 7.9 pp addition during the second quarter of 2021. The increase in PCE was driven by services (led transportation services) and nondurable goods (led by gasoline and other energy goods). Inventories rose, adding 2.07 pp to GDP. Residential investment subtracted a total of 0.38 pp from GDP.

Business investment added 1.94 pp from GDP growth. Investment in intellectual property and equipment added 0.61 pp to GDP, while investment in structures subtracted 0.19 pp.

Government spending increased, adding 0.14 pp to GDP. The federal government subtracted 0.33 pp while state and local governments added 0.46 pp.

Read the BEA release.