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The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) on Friday issued its “advance” (first of three) estimate of third-quarter 2018 gross domestic product (GDP). According to the BEA, U.S. real GDP rose at an inflation and seasonally adjusted rate of 3.5%, down from a final second-quarter growth rate estimate of 4.2%.

The BEA attributed the sequential slowdown in growth to a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.

The last estimate ahead of this morning’s announcement showed a consensus for 3.3% growth in real third-quarter GDP. Earlier estimates had been significantly higher. Third-quarter GDP totaled an estimated $20.659 trillion, up from $20,411.9 trillion in the second quarter.

Real disposable personal income rose 2.5%, the same as the second-quarter growth rate. On a current-dollar basis, growth slipped from $180.7 billion in the second quarter to $180.3 billion.

The personal consumption expenditures (PCE) price index rose 1.6% in the third quarter, compared to a rise of 2% in the second quarter. Excluding food and energy, the PCE index rose 1.6%, compared to 2.1% a year ago.

With spending up, savings fell. Personal savings declined from $1.05 billion to $999.6 billion quarter over quarter. The personal savings rate was 6.4%, down from 6.8% in the second quarter.

The BEA noted that exports dropped primarily as a result of downturns in foods, feeds, and beverages (soybeans being primarily responsible); petroleum and petroleum products; and non-automotive capital goods.

The nearly $75 billion third-quarter increase in imports was largely due to increases in consumer goods and motor vehicles.

The trade deficit in goods continued rising in September. Exports of goods rose by $2.5 billion to $141.0 billion, but the gains seen in industrial supplies, motor vehicles and consumer and capital goods were pulled down by food exports. The imports of goods rose by $3.1 billion to $217.0 billion.

The increase in private inventory investment was attributed to wholesale trade (notably farm products) and manufacturing industries. Although the BEA does not address this issue further, farm products — particularly soybeans — are piling up with no place to go.

As for manufacturing inventory growth, the Commerce Department’s latest report on durable goods orders showed that the reading on non-defense capital goods, excluding aircraft, was down by 0.1% in September. While the number is barely in the red, it signaled weaker demand for appliances, components, fabricated metals and electrical equipment.