The Advance Estimate for Q3 GDP came in at 2.0%, slightly better than the consensus estimates, which ranged from 1.7% to 1.9% depending on the source. The Briefing.com consensus I generally feature was for 1.9%.
Here is an excerpt from the Bureau of Economic Analysis news release:
Real gross domestic product — the output of goods and services produced by labour and property located in the United States — increased at an annual rate of 2.0 per cent in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 per cent.
The Bureau emphasised that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see box below). The “second” estimate for the third quarter, based on more complete data, will be released on November 29, 2012.
The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and residential fixed investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The acceleration in real GDP in the third quarter primarily reflected an upturn in federal government spending, a downturn in imports, an acceleration in PCE, a smaller decrease in private inventory investment, an acceleration in residential fixed investment, and a smaller decrease in state and local government spending that were partly offset by downturns in exports 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 per cent 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).
Photo: Doug Short
In summary, the Q3 GDP Advance Estimate of 2.0%, despite the improvement over Q2, continues to highlight the subnormal trend of the post-recession recovery — now in its thirteenth quarter after the end of the last recession.