The US economy grew at a 2% pace in the third quarter — better than expected — according to the final estimate of third-quarter gross domestic product released Tuesday.
Expectations were for the reading to show the economy growing at a 1.9% pace in the third quarter, down slightly from the revised pace of 2.1% reported last month in the second estimate.
This report also gave us another reading on personal consumption — a more comprehensive way to track consumer spending than retail sales — which grew at a pace of 3% during the third quarter.
Expectations were for this measure to be revised down slightly to show growth of 2.9%.
And so overall this report more or less confirms the view that the US economy continues to grow at a modest but steady pace.
In a note to clients after the report, Michael Gapen at Barclays wrote: “The main source of the upside surprise relative to our forecast came from fixed investment and inventories. Equipment spending was revised up to 9.9% from 9.5% and intellectual property investment was unchanged at -0.8% versus our expectation for a 2.4% decline. The change in private inventories at $85.5 billion meant inventories are estimated to have subtracted 0.7% from growth in the quarter against our expectation for an 0.8% decline.”
Gapen added: “Altogether, the third estimate of Q3 GDP does little to change the picture of solid domestic activity offset by weakness abroad, as final sales to domestic purchasers (GDP less trade and inventories) rose 2.9% in the quarter.”
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