US Economy Grows at 2.9% in the 3rd Quarter

Washington, D.C.—US economy increased at an annual rate of 2.9 percent in the third quarter of 2016, according to the “advance” estimate released by the Bureau of Economic Analysis.

The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

 

The acceleration in real GDP growth in the third quarter reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, and an upturn in federal government spending. These were partly offset by a smaller increase in PCE, and a larger increase in imports.

Current-dollar GDP increased 4.4 percent, or $201.1 billion, in the third quarter to a level of $18,651.2billion. In the second quarter, current dollar GDP increased 3.7 percent, or $168.5 billion.

The price index for gross domestic purchases increased 1.6 percent in the third quarter, compared with an increase of 2.1 percent in the second quarter (table 4). The PCE price index increased 1.4 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.

Current-dollar personal income increased $153.6 billion in the third quarter, compared with an increase of $153.1 billion in the second.

Disposable personal income increased $125.3 billion, or 3.6 percent, in the third quarter, compared with an increase of $140.6 billion, or 4.1 percent, in the second. Real disposable personal income increased 2.2 percent, compared with an increase of 2.1 percent.

Personal saving was $800.6 billion in the third quarter, compared with $793.5 billion in the second. The personal saving rate — personal saving as a percentage of disposable personal income — was 5.7 percent in the third quarter, the same as in the second.

 

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