Real GDP grew at an annual rate of 2.8% in the third quarter of 2024, according to the “second” estimate released by the Bureau of Economic Analysis. Real GDP increased 3.0% in the second quarter of 2024.
The increase in real GDP primarily reflected increases in consumer spending, exports, federal government spending, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. Compared to the second quarter, the deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated.
Consumption added 2.37 percentage points (pp) to growth, following a 1.9 pp addition in the second quarter of 2024. The increase in PCE was driven by services (1.20 pp) such as those in household consumption expenditure: healthcare (0.70 pp), housing and utilities (0.12 pp) and recreation services (0.10 pp) added to growth. Other services subtracted (0.01 pp) to real growth. Goods added (1.25 pp) to real GDP which included motor vehicles and parts (0.23 pp), furnishings and durable household equipment (0.14 pp), recreational goods and vehicles (0.18 pp), and financial services and insurance (0.19). Clothing and footwear added (0.03) pp from real GDP, respectively.
Business investment added 0.21 pp to real GDP. Nonresidential fixed investment added 0.52 pp, with equipment and intellectual property products adding 0.53 pp and 0.14 pp, respectively, and structures subtracting 0.15 pp. Residential fixed investment subtracted 0.21 pp. Transportation equipment, a part of equipment added 0.24 pp, while software, a part of intellectual property products, added 0.05 pp.
Government spending added 0.83 pp to real GDP. The Federal government added 0.55 pp to real GDP while state and local added 0.28 pp.
Exports added 0.79 pp to real GDP while imports subtracted 1.37 pp.
Read the BEA release.
