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Real gross domestic product (GDP) increased 3.5% in the third quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. Core PCE +1.6% vs +2.1% expected


US GDP 3Q 18

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

The deceleration in real GDP growth in the third quarter reflected a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second.

These movements were partly offset by an upturn in private inventory investment. Current dollar GDP increased 4.9 percent, or $247.1 billion, in the third quarter to a level of $20.66 trillion. In the second quarter, current-dollar GDP increased 7.6 percent, or $370.9 billion 

GDP highlights

Growth

  • GDP 3.5% vs 3.3% expected
  • Personal Consumption 4.0% vs 3.3% expected, Best since 2014
  • Final sales to private domestic purchases rose 3.1% after rising 4.3% in prior quarter
  • Non residential fixed investment or spending on equipment, structures and intellectual property rose 0.8% in the 3rd quarter after rising 8.7% in the prior quarter.
  • Inventories provided the biggest contribution since early 2015
  • The drag from trade was the largest in 33 years government
  • Spending rose the most since 2016

Inflation

  • GDP Price index 1.7% vs 2,1% expected
  • Core PCE QoQ 1.6% versus 1.8% expected
  • GDP deflator 1.4% versus 2.1% expected 

Source: Bureau of Economic Analysis

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