The final look at the economy for the third quarter was generally dissatisfying.
The Bureau of Economic Analysis (BEA) reports the "third"estimate of real gross domestic product (GDP) -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 2.0% after growing 2.1% in the “second” estimate and 3.9% in the second quarter.
All told, that's just shy of the average growth rate of 2.1% for the preceding 12 quarters.
More of the same
With the third estimate for the the July – September quarter, the general picture of economic growth showed little change.
The increase in real GDP primarily reflected positive contributions from personal consumption expenditures (PCE), or consumer spending, nonresidential fixed investment, state and local government spending, residential fixed investment, and exports that were partly offset by a decline in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
The slowdown was due to a downturn in private inventory investment and decelerations in exports, in PCE, in nonresidential fixed investment, and in state and local government spending that were partly offset by a deceleration in imports.
Inflation and profits
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3% in the third quarter, down 0.2% from the second. Excluding food and energy prices, the “core” rate of GDP inflation was up 1.3%, compared with an increase of 1.2%.
Corporate profits did not fare well in the third quarter, plunging $33.0 billion following a $70.4 billion in the second three months of the year. Consequently, taxes on corporate income fell $6.9 billion after surging $31.3 billion in the second quarter.
The complete report is available on the BEA website.