3rd quarter GDP growth revised upwards to 2.5%

Nov 23 2010

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The Bureau of Economic Analysis (BEA) released its second estimate of growth in the inflation-adjusted (“real”) gross domestic product (GDP) for the 3rd quarter of 2010

According to the second estimate, annualized GDP growth in the 3rd quarter was 2.5%.   This marks an upward revision from the advance estimate of 2.0%.  Growth in the 2nd quarter was 1.7%, and was 3.7% in the 1st quarter of 2010.   The BEA will release its third estimate for 3rd quarter GDP growth on December 22nd.


The upward revision (0.5 percentage point or $16.7 billion) primarily reflected upward revisions to personal consumption expenditures, exports, and state and local government spending.  Partly offsetting these upward revisions was a downward revision to private inventory investment.

The 2.5% rate of growth primarily reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, federal government spending, and exports.  These positive contributions were partly offset by negative contributions from residential fixed investment and imports.

The acceleration in GDP growth, from a rate of 1.7% in the 2nd quarter, came primarily from a steep deceleration in imports (a subtraction from GDP) and from accelerations in private inventory investment and personal consumption expenditures.  These were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and exports.  

The change in real private inventories added 1.30 percentage points to the change in 3rd quarter GDP, compared to a contribution of 0.82 percentage point in the 2nd quarter.

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