Politics & Money

U.S. GDP holds steady at 2.1% in third estimate

Consumer spending offset by weak gains in the business sector

Inflation-adjusted GDP increased at an annual rate of 2.1% in the third quarter, according to the third estimate from the Bureau of Economic Analysis. In the second quarter of the year, GDP grew at a 2% pace.

Friday’s GDP estimate is based on more complete source data than October’s second estimate.

With the third estimate for Q3, upward revisions to personal consumption expenditures and nonresidential fixed investment were offset by a downward revision to private inventory investment.

The GDP increase also reflects positive contributions from federal government spending, residential investment, exports, and state and local government spending. The acceleration in Q3 reflects upturns in both exports and residential fixed investment.

Notably, corporate profits, which account for current production, decreased $4.7 billion in Q3, compared to an increase of $75.8 billion in Q2. Overall, profits decreased by 0.2%  at a quarterly rate in Q3 after rising 3.8% in the previous quarter.

Current-dollar GDP increased by 3.8%, or $202.3 billion, in Q3 to a level of $21.54 trillion. This is down from the second quarter’s 4.7%, or $241.4 billion.

The gross domestic price purchase index increased by 1.4% in Q3, down from an increase of 2.2% in Q2.  Personal consumption expenditures – meaning household spending – increased by 1.5%, down from 2.4% last quarter.

Here are updates to the previous estimate:

Real GDP: Remained at last estimate’s 2.1%

Current-dollar GDP:  Remained at last estimate’s 3.8%

Gross domestic purchases price index:  Remained at last estimate’s 1.4%

Personal consumption expenditures: Remained at last estimate’s 1.5%

The chart below shows that GDP remains almost on par from the second quarter and sits nearly one percentage points below Q3 of 2018.

Most Popular Articles

FHA, VA join Fannie, Freddie in relaxing some standards

With the coronavirus continuing to reshape the face of the country and the economy, the biggest players in the mortgage business are moving to try to make it easier to lend. Last week, it was Fannie and Freddie. Now, it’s the FHA and VA’s turn.

Mar 30, 2020 By

Latest Articles

FHA rolls out new mortgage relief options amid coronavirus outbreak

HUD announced Thursday that the FHA is rolling out a “tailored set of mortgage payment relief options” for FHA mortgage borrowers who are being affected by the coronavirus. One of those payment relief options gives borrowers the ability to defer their mortgage payments for at least six months and as many as 12 months.

Apr 02, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please