The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) on Thursday issued its final revision for third-quarter gross domestic product (GDP). According to the BEA, U.S. GDP rose at an inflation-adjusted and seasonally adjusted rate of 3.5%, higher than the October estimate of 2.9% and the November estimate of 3.2%.
GDP rose to 1.4% in the second quarter of 2016 and just 0.8% in the first quarter.
Bloomberg had a consensus estimate of 3.3% for the revised estimate. Dow Jones (The Wall Street Journal) also expected growth of 3.3%.
Residential fixed investment (home building) personal consumption expenditures, and state and local government spending rose more than expected. Corporate profits increased $117.8 billion in the third quarter, compared with a decrease of $12.5 billion in the second quarter.
Profits of domestic financial corporations rose $50.1 billion in the third quarter, compared with a $5.6 billion increase in the second quarter. Profits of nonfinancial corporations increased $66.4 billion, compared with a drop of $56.1 billion in the prior quarter.
Gross domestic income (GDI) rose by 4.8% in the third quarter, up from just 0.7% in the second quarter. The estimate for consumer spending fell from 4.3% in the second quarter to 3% in the third quarter. The personal consumption expenditure (PCE) price index rose by 1.5%, compared with an increase of 2% in the second quarter. Excluding food and energy prices, the PCE price index increased 1.7%, compared with a 1.8% increase in the second quarter.
Sales of durable goods rose 11.6% in the third quarter, compared with an increase of 9.8% in the second quarter. Sales of nondurable goods fell 0.5%, compared with an increase of 5.7% in the second quarter.
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