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UPDATE: The final release for Q3 GDP is out.U.S. economic output rose 3.1 per cent in Q3 versus consensus estimates of a 2.8 per cent gain.
An increase in nonfarm private inventories was one of the largest single drivers of growth, contributing 1.1 percentage points to the number.
Personal consumption growth came in at 1.6 per cent versus expectations of a 1.4 per cent rise.
Below, the full text from the BEA:
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 3.1 per cent in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 per cent.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 2.7 per cent (see “Revisions” on page 3). The third estimate has not greatly changed the general picture of the economy for the third quarter except that personal consumption expenditures (PCE) is now showing a modest pickup, and imports is now showing a downturn.
The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, private inventory investment, federal government spending, residential fixed investment, and exports that were partly offset by a negative contribution from nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The acceleration in real GDP in the third quarter primarily reflected upturns in private inventory investment and in federal government spending, a downturn in imports, an upturn in state and local government spending, and an acceleration in residential fixed investment that were partly offset by a downturn in nonresidential fixed investment and a deceleration in exports.
FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. per cent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2005) dollars. Price indexes are chain-type measures.
This news release is available on www.bea.gov along with the Technical Note (www.bea.gov/newsreleases/national/gdp/2012/tech3q12_3rd.htm) and Highlights (www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp3q12_3rd_fax.pdf) related to this release. For information on revisions, see “Revisions to GDP, GDI, and Their Major Components” (www.bea.gov/scb/pdf/2011/07 July/0711_revisions.pdf).
Final sales of computers added 0.11 percentage point to the third-quarter change in real GDP after subtracting 0.10 percentage point from the second-quarter change. Motor vehicle output subtracted 0.25 percentage point from the third-quarter change in real GDP after adding 0.20 percentage point to the second-quarter change.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.4 per cent in the third quarter, the same increase as in the second estimate; this index increased 0.7 per cent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.2 per cent in the third quarter, compared with an increase of 1.4 per cent in the second.
Real personal consumption expenditures increased 1.6 per cent in the third quarter, compared with an increase of 1.5 per cent in the second. Durable goods increased 8.9 per cent, in contrast to a decrease of 0.2 per cent. Nondurable goods increased 1.2 per cent, compared with an increase of 0.6 per cent. Services increased 0.6 per cent, compared with an increase of 2.1 per cent.
Real nonresidential fixed investment decreased 1.8 per cent in the third quarter, in contrast to an increase of 3.6 per cent. Nonresidential structures was unchanged in the third quarter; in the second quarter, structures increased 0.6 per cent. Equipment and software decreased 2.6 per cent in the third quarter, in contrast to an increase of 4.8 per cent in the second. Real residential fixed investment increased 13.5 per cent, compared with an increase of 8.5 per cent.
Real exports of goods and services increased 1.9 per cent in the third quarter, compared with an increase of 5.3 per cent in the second. Real imports of goods and services decreased 0.6 per cent, in contrast to an increase of 2.8 per cent.
Real federal government consumption expenditures and gross investment increased 9.5 per cent in the third quarter, in contrast to a decrease of 0.2 per cent in the second. National defence increased 12.9 per cent, in contrast to a decrease of 0.2 per cent. Nondefense increased 3.0 per cent, in contrast to a decrease of 0.4 per cent. Real state and local government consumption expenditures and gross investment increased 0.3 per cent, in contrast to a decrease of 1.0 per cent.
The change in real private inventories added 0.73 percentage point to the third-quarter change in real GDP, after subtracting 0.46 percentage point from the second-quarter change. Private businesses increased inventories $60.3 billion in the third quarter, following increases of $41.4 billion in the second and $56.9 billion in the first.
Real final sales of domestic product — GDP less change in private inventories — increased 2.4 per cent in the third quarter, compared with an increase of 1.7 per cent in the second.
Gross domestic purchases
Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 2.6 per cent in the third quarter, compared with an increase of 1.0 per cent in the second.
Gross national product
Real gross national product — the goods and services produced by the labour and property supplied by U.S. residents — increased 2.9 per cent in the third quarter, compared with an increase of 2.1 per cent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which decreased $4.7 billion in the third quarter after increasing $27.4 billion in the second; in the third quarter, receipts decreased $2.0 billion, and payments increased $2.7 billion.
Current-dollar GDP — the market value of the nation’s output of goods and services — increased 5.9 per cent, or $225.4 billion, in the third quarter to a level of $15,811.0 billion. In the second quarter, current-dollar GDP increased 2.8 per cent, or $107.3 billion.
Gross domestic income
Real gross domestic income (GDI), which measures the output of the economy as the costs incurred and the incomes earned in the production of GDP, increased 1.4 per cent in the third quarter, in contrast to a decrease of 0.7 per cent in the second. For a given quarter, the estimates of GDP and GDI may differ for a variety of reasons, including the incorporation of largely independent source data. However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of change.
The “third” estimate of the third-quarter per cent change in real GDP is 0.4 percentage point, or $14.4 billion, more than the “second” estimate issued last month, primarily reflecting an upward revision to personal consumption expenditures, a downward revision to imports, and upward revisions to exports and to state and local government spending.
Advance Estimate Second Estimate Third Estimate
(per cent change from preceding quarter)
Real GDP…………………………. 2.0 2.7 3.1
Current-dollar GDP………………… 5.0 5.5 5.9
Gross domestic purchases price index… 1.5 1.4 1.4
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $45.7 billion in the third quarter, compared with an increase of $21.8 billion in the second quarter. Current-production cash flow (net cash flow with inventory valuation adjustment) — the internal funds available to corporations for investment — increased $32.5 billion in the third quarter, compared with an increase of $6.0 billion in the second.
Taxes on corporate income increased $9.1 billion in the third quarter, in contrast to a decrease of $10.3 billion in the second. Profits after tax with inventory valuation and capital consumption adjustments increased $36.7 billion in the third quarter, compared with an increase of $31.9 billion in the second. Dividends increased $12.8 billion, compared with an increase of $20.4 billion; current- production undistributed profits increased $23.8 billion, compared with an increase of $11.6 billion.
Domestic profits of financial corporations increased $68.1 billion in the third quarter, in contrast to a decrease of $39.7 billion in the second. Domestic profits of nonfinancial corporations decreased $14.1 billion in the third quarter, in contrast to an increase of $27.8 billion in the second. In the third quarter, real gross value added of nonfinancial corporations decreased, and profits per unit of real value added was unchanged, reflecting an increase in unit prices that was offset by increases in both the unit labour costs and unit nonlabor costs corporations incurred.
The rest-of-the-world component of profits decreased $8.2 billion in the third quarter, in contrastto an increase of $33.6 billion in the second. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus dividends paid by U.S. corporations to unaffiliated foreign residents. The third-quarter decrease was accounted for by a larger increase in payments than in receipts.
Profits before tax with inventory valuation adjustment is the best available measure of industry profits because estimates of the capital consumption adjustment by industry do not exist. This measure reflects depreciation-accounting practices used for federal income tax returns. According to this measure, domestic profits of financial corporations increased. The increase in profits of financial corporations was more than accounted for by an increase in “other” financial industries. Domestic profits of nonfinancial corporations decreased, primarily reflecting decreases in wholesale trade and in manufacturing that were partly offset by an increase in “other” nonfinancial industries. Within manufacturing, durable goods industries accounted for most of the decrease. However, within nondurable goods, a notable decrease in chemical products was largely offset by increases in “other” nondurable goods and in petroleum and coal products.
Profits before tax increased $86.2 billion in the third quarter, in contrast to a decrease of $16.3 billion in the second. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments. These adjustments convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to the current-cost measures used in the national income and product accounts. The capital consumption adjustment increased $2.4 billion in the third quarter (from -$202.4 billion to -$200.0 billion), in contrast to a decrease of $1.7 billion in the second. The inventory valuation adjustment decreased $42.8 billion (from $16.0 billion to -$26.8 billion), in contrast to an increase of $39.7 billion.
ORIGINAL: Minutes away from the third and final release for U.S. Q3 GDP at 8:30 AM ET.
The consensus estimate among economists polled by Bloomberg is for GDP growth at an annualized rate of 2.8 per cent in the third quarter, up slightly from the most recent estimate of 2.7 per cent growth published in November.
Personal consumption growth is expected to be unchanged from the most recent release at 1.4 per cent.
The GDP price index is expected to stay the same at 2.7 per cent, as is core PCE, at 1.1 per cent.
We will have the release LIVE at 8:30 AM ET. Click here for updates >