Third quarter GDP (Third Estimate) increases 4.9%

Real GDP grew at an annual rate of 4.9% in the third quarter of 2023, according to the “second” estimate released by the Bureau of Economic Analysis. Real GDP increased 2.1% in the second quarter of 2023. The third estimate declined 0.3 percentage points (pp) from an annual rate of 5.2% in the “second” estimate, reflecting a downward revision to consumer spending. Imports were also revised downward.

The increase in real GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Consumption added 2.11 pp to growth, following a 0.55 pp addition in the second quarter of 2023. The increase in PCE was driven by goods (1.09 pp) including recreational goods and vehicles (0.40 pp), furnishings and durable household equipment (0.10 pp), other nondurable goods (0.36 pp), and clothing and footwear (0.11 pp). Motor vehicles and parts and gasoline and other energy goods subtracted 0.03 and 0.02 pp, respectively, from real GDP growth. Services (1.02 pp) such as those in the household consumption expenditure: housing and utilities (0.35 pp), food services and accommodations (0.34 pp), and health care (0.30 pp) added to growth. Other services subtracted 0.18 pp from real GDP growth. Inventories added 1.27 pp.

Business investment added 0.46 pp to GDP. Nonresidential fixed investment added 0.21 pp, with equipment subtracting 0.22 pp, structures adding 0.33 pp, and intellectual property needs adding 0.10 pp. Residential fixed investment added 0.26 pp.

Government spending increased, adding 0.99 pp to GDP. Federal and state-local government added 0.45 and 0.53 pp to GDP, respectively.

Exports added 0.59 pp to GDP while imports subtracted 0.56 pp.

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