GDP Q3 Second Estimate Rises to 3.6%
December 5, 2013
The Second Estimate for Q3 GDP, to one decimal, rose to 3.6 percent from the 2.8 percent of the Advance Estimate. Investing.com had forecast 3.0 percent. The GDP deflator used to calculate real (inflation-adjusted) GDP was lifted slightly from 1.9 percent to 2.0 percent.
Here is an excerpt from the Bureau of Economic Analysis news release:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.6 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.
The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.8 percent (see "Revisions" on page 3). With this second estimate for the third quarter, the increase in private inventory investment was larger than previously estimated.
The increase in real GDP in the third quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, nonresidential fixed investment, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in private inventory investment, a deceleration in imports, and an acceleration in state and local government spending that were partly offset by decelerations in exports, in PCE, and in nonresidential fixed investment. [Full Release]
Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I've also included recessions, which are determined by the National Bureau of Economic Research (NBER).
Here is a close-up of GDP alone with a line to illustrate the 3.3 average (arithmetic mean) for the quarterly series since the 1947, with the latest GDP revisions, this number had been at 3.3 for 14 quarters, slipped to 3.2 in Q4 of 2012, and is now back to 3.3. I've also plotted the 10-year moving average, currently at 1.7, down from 1.8 last quarter. The current GDP is now over double this moving average.
Here is the same chart with a linear regression that illustrates the gradual decline in GDP over this timeframe.
Perhaps the most telling representation of slowing growth in the US economy is the year-over-year rate of change. The latest data point is off its interim low of 1.32 percent in Q1, but it remains lower than the onset of all recessions except the ones that began in 1980 and 1990.
And for a bit of political trivia, here is a look at GDP by party in control of the White House and Congress.
In summary, the Q3 GDP Second Estimate of 3.6 was better that forecast.