URGENT: US GDP grows 2.8% in Q3

The US GDP grew at an annualised pace of 2.8 per cent in the third quarter from 3.0 per cent in the second quarter, according to US Bureau of Economic Analysis’ advance estimate on Wednesday.

The real GDP growth in the third quarter primarily reflected increases in consumer spending, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, also rose.

The higher consumer spending reflected increases in both goods and services. Within goods, the key contributors were other non-durable goods – led by prescription drugs – and motor vehicles and parts. Within services, the key contributors were health care led by outpatient services as well as food services and accommodations.

Moreover, the growth in exports primarily reflected an increase in goods – led by capital goods, excluding automotive. Defence spending led the increase in federal government spending. The rise in imports primarily reflected an increase in goods – led by capital goods, excluding automotive.

Compared to the second quarter, the deceleration in real GDP in the third quarter was primarily due to a downturn in private inventory investment and a larger decrease in residential fixed investment.  While exports, consumer spending, and federal government spending accelerated, they were not enough to offset the negative impact of the other factors.

Compared to the second quarter, the overall economic growth rate slowed down during this period.

Attribution: US Bureau of Economic Analysis