GDP Increases to 4.1% in 3Q; State Unemployment Rates Drop
- Dec 23, 2013
Real U.S. gross domestic product increased at an annualized rate of 4.1 percent in the third quarter of 2013, according to the Bureau of Economic Analysis final estimate on the third quarter of GDP, which was released on Friday. The previous estimate put annual GDP growth for the quarter at 3.6 percent, and the preliminary estimate came in at 2.8 percent.
The final estimate, according to the BEA, is based on more complete source data than the previous two estimates. The positive revision to the final estimate mainly reflected upward revisions to personal consumption expenditures—people buying things—and to nonresidential fixed investment, partly offset by a downward revision to residential fixed investment.
Even so, the main driver of the spike in GDP in the third quarter was a large rise in businesses inventory, the likes of which tend to be transitory, along with a drop in imports. State and local governments also increased their spending, up 1.7 percent for the quarter. By contrast, federal spending continues to be a drag on GDP, dropping 1.5 percent during the quarter. The bump up in GDP isn’t expected to last through the fourth quarter, though there will continue to be growth, according to most predictions (perhaps an annualized 2 percent, which is more in line with the rest of the year).
The BEA also reported that real personal consumption expenditures increased 2 percent in the third quarter, compared with an increase of 1.8 percent during the second. Durable goods spending was up by 7.9 percent, compared with an increase of 6.2 percent in the previous quarter, and nondurable goods increased 2.9 percent, compared with a 1.6 percent increase during the second quarter of 2013. Spending on services was up 0.7 percent, compared with an increase of 1.2 percent during the previous quarter.
State Unemployment Rates Drop
The Bureau of Labor Statistics reported on Friday that state unemployment rates were generally lower in November. Forty-five states and the District of Columbia had unemployment rate decreases from October, while five states had no change. In no state did unemployment rise in November.
Year over year, employment has also improved in the vast majority of states. Forty-two states had unemployment rate decreases from a year earlier, while only seven states and D.C. suffered increases, and one state had no change. The national jobless rate declined to 7 percent from October, which was 0.8 percentage points lower than in November 2012.
Nevada and Rhode Island are tied for the dubious honor of the highest unemployment rates among the states, coming in at 9 percent each in November. The next highest rates were in Michigan, 8.8 percent, and Illinois, 8.7 percent. Energy-booming North Dakota continued to have the lowest jobless rate, 2.6 percent.
Wall Street had another up day on Friday, with the Dow Jones Industrial Average up 42.06 points, or 0.26 percent. The S&P 500 advanced 0.48 percent and the Nasdaq was gained 0.93 percent.