Magazine article Economic Trends

Real GDP: Third-Quarter Final Estimate

Magazine article Economic Trends

Real GDP: Third-Quarter Final Estimate

Article excerpt

01.06.09

Real GDP decreased at an annualized rate of 0.5 percent in the third quarter of 2008 (unchanged from the preliminary estimate), according to the final estimate released by the Bureau of Economic Analysis. Personal consumption expenditures were revised down 0.1 percentage point to -3.8 percent, reflecting downward adjustments to both nondurables and services consumption, which were partially offset by an upward revision to durables consumption. Business fixed investment was largely unchanged during the revision. However, residential investment was revised up from -17.6 percent to -16.1 percent. Export growth in the third quarter was revised down again, increasing only 3.0 percent, compared to 3.4 percent in the preliminary release and 5.9 percent in the advance estimate. Imports were revised down to -3.5 percent from -3.2 percent in the preliminary release and -1.9 percent in the advance estimate.

Personal consumption expenditures, which last quarter added 0.9 percentage point to real GDP growth, subtracted 2.8 percentage points in the third quarter, marking the first time this component has subtracted from growth since the fourth quarter of 1991. Net exports added 1.1 percentage points to growth in the third quarter, following a 2.9 percentage point addition in the second quarter and a 1.4 percentage point addition over the past four quarters. The contribution from private inventories in the third quarter was revised up from 0.6 percentage point in the advance release to 0.8 percentage point in the final estimate (though this is down 0.1 percentage point from the preliminary estimate). Government spending added 1.1 percentage points to real GDP growth during the quarter, outpacing the this component's average contribution over the past four quarters of 0.6 percentage point. Much of the increase was due to a jump in national defense spending, which added 0.9 percentage point to growth in the third quarter, compared to 0.4 percentage point last quarter.

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Personal consumption decreased at an annualized rate of 3.8 percent in the third quarter of 2008, its steepest decline since 1980. The latest indicators of monthly personal consumption show a 5. …

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