The US economy keeps beating expectations.

The first revision to third quarter GDP showed the US economy grew at an annualized rate of 3.9% during the quarter.

Expectations were for the headline GDP number to fall slightly, to 3.3% from the initial 3.5% reading.

That initial reading also topped Wall Street estimates.

According to the latest release from the BEA, “With the second estimate for the third quarter, private inventory investment decreased less than previously estimated, and both personal consumption expenditures (PCE) and nonresidential fixed investment increased more. In contrast, exports increased less than previously estimated.”

Following the report, Ian Shepherdson, chief economist at Pantheon Macroeconomic said, “In one line: Surprising, welcome, and probably not (entirely) sustainable.” 

Meanwhile, Deutsche Bank economist Joe LaVorgna on Twitter said the inventory-to-sales ratio bodes well for future production, while LaVorgna also expects Q4 GDP to come in at 4.2%.


In the third quarter, personal consumption expenditures, or PCE — a measure of inflation — rose 2.2%. Expectations were for PCE to show a 1.9% increase in the third quarter.

On a quarter-on-quarter basis, PCE rose 0.4% in Q3. 

Some of the standout numbers from the report include a 16% increase in defence spending during the quarter, and overall government consumption expenditures and gross investment rose 9.9% in the quarter.

Nonresidential fixed investment rose 7.1% in the third quarter, with equipment investment rising 10.7% and investments in intellectual property rising 6.4%. 

Here’s the table showing the breakdown of the third quarter.

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