Economy Watch: GDP Growth Consistent in 3Q

Real GDP growth hit 3 percent in the third quarter, according to the Bureau of Economic Analysis, driven by increases in personal consumption expenditures, private inventory investment and other factors.

Source: Bureau of Economic Analysis, Third-Quarter 2017
Source: Bureau of Economic Analysis, Third-Quarter 2017

Real U.S. gross domestic product increased at an annualized rate of 3 percent in the third quarter of 2017, according to the Bureau of Economic Analysis’ advance estimate. That’s only a little less than during the second quarter, when real GDP increased at a 3.1 percent annualized rate.

The increase in real GDP in the third quarter was driven by personal consumption expenditures, private inventory investment, nonresidential fixed investment, exports and federal government spending.

These increases were partly restrained by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased during the quarter.

Previously, the BEA reported that personal income increased 0.2 percent in August compared with July. Disposable personal income increased 0.1 percent. Fittingly, personal consumption expenditures increased 0.1 percent for the month as well.