Tuesday brought the first revision for third-quarter gross domestic product (GDP), and the revision was both higher than the first estimate and higher than the expectations already shown. GDP’s first revision for the third quarter was a 3.2% gain, versus a preliminary estimate of 2.9%.
Bloomberg had a consensus estimate of 3.1% on the first revision, with an Econoday range of $2.9% to 3.2%. Dow Jones (Wall Street Journal) showed a consensus estimate of 3.0%.
The Bureau of Economic Analysis (BEA) indicated that the revision was based on more complete source data than were available for the advance estimate issued last month. The general picture of economic growth remains the same, and the increase in personal consumption expenditures was larger than previously estimated.
Real gross domestic income increased by 5.2% in the third quarter, compared with an increase of 0.7% in the second. The average of real GDP and real gross domestic income rose by 4.2% in the third quarter, versus an increase of 1.1% in the second quarter.
According to the BEA, the increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment and federal government spending. Offsets, or the areas that dragged on the number, were negative contributions from residential fixed investment and state and local government spending. Also, imports increased and acted as a subtraction in GDP.
The BEA press release noted:
The acceleration in real GDP in the third quarter primarily reflected an upturn in private inventory investment, an acceleration in exports, an upturn in federal government spending, and smaller decreases in state and local government spending and residential fixed investment, that were partly offset by a deceleration in PCE, an acceleration in imports, and a deceleration in nonresidential fixed investment.
Current-dollar GDP increased 4.6 percent, or $207.8 billion, in the third quarter to a level of $18,657.9 billion. In the second quarter, current dollar GDP increased 3.7 percent, or $168.5 billion.
The price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 2.1 percent in the second quarter. The PCE price index increased 1.4 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.