Following revisions, real gross domestic product rose at an annual rate of 3.4% in the third quarter of 2018, according to the third estimate released by the U.S. Bureau of Economic Analysis.
This downwardly revised GDP estimate is based on more complete source data than was available for the second estimate issued last month, which estimated GDP growth at 3.5%. The chart below shows GDP is now up nearly one percentage point and a half from the first quarter, and about one percentage point from the third quarter of 2017.
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Real gross domestic income growth is up 4.3% in the third quarter, compared to the 0.9% growth seen in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weighs GDP and GDI, increased 3.8% in the third quarter, increasing from 2.5% from the second quarter.
The increase in real GDP in the third quarter reflected positive contributions from non-residential fixed investment, personal consumption expenditures, private inventory investment, federal government spending and state and local government spending. These were partly offset by negative contributions from exports and residential fixed investment.
Notably, the deceleration in real GDP growth in the third quarter primarily reflects a downturn in exports and decelerations in nonresidential fixed investment and in PCE. That being said, imports climbed in the third quarter after falling in the second, which was partly offset by an upturn in private inventory investment.
An update to GDP released by BEA shows that the third quarter real GDP was revised 0.1 percentage point from the second estimate, which reflects downward revisions to PCE and exports, which were partly offset by an upward revision to private inventory investment.
Here are updates to the previous estimate:
Real GDP: Decreased to 3.4% in the third estimate, down from last estimate’s 3.5%.
Current-dollar GDP: Decreased to 4.9%, down from last estimate’s 5%.
Real GDI: Increased to 4.3%, up from last estimate’s 4%.
Average of Real GDP and Real GDI: Remained unchanged at 3.8% at the third estimate.
Gross domestic purchases price index: Remained unchanged at 1.7% at the second estimate.
Personal consumption expenditures: Increased to 1.6%, up from last estimate’s 1.5%.