Real GDP rose at an annual rate of 5.2 percent in the third quarter of 2023, according to the “second” estimate issued by the Bureau of Economic Analysis. In the second quarter, real GDP rose 2.1 percent.
Today’s GDP estimate is based on more complete source data than was available for the “advance” estimate released last month. In advance estimate, the increase in real GDP was 4.9 percent. The update primarily reflects upward revisions to non-residential fixed investment and state and local government spending that were partially offset by a downward revision of consumer spending. Imports, which represent a subtraction in the calculation of GDP, have been adjusted.
The increase in real GDP reflects increases in consumer spending, private stock investment, exports, state and local government spending, federal government spending, residential fixed investment, and non-residential fixed investment. Imports increased
Compared to the second quarter, the acceleration in real GDP in the third quarter primarily reflects accelerating consumer spending, private inventory investment, and higher exports, partially offset by a slowdown in non-residential fixed investment. Imports appeared.
Current dollar GDP rose 8.9 percent at an annual rate, or $581.5 billion, in the third quarter to $27.64 trillion, an upward revision of $20.9 billion from previous estimates. More information about the source data behind the estimates is available in the “Primary Source Data and Assumptions” file on the BEA website.
The GDP price index rose 3.0 percent in the third quarter, the same as the previous estimate and the PCE price index rose 2.8 percent, a downward revision of 0.1 percentage points.
Strong Economic Performance: Rising Income and Profits
In the third quarter, personal income rose by $218.3 billion, beating previous expectations of an increase of $18.8 billion. This increase mainly reflects increases in compensation such as wages and salaries, non-agricultural owners’ income, and personal interest income. These increases were partially offset by a decrease in personal current remittance income.
Personal disposable income increased by $144.0 billion or 2.9 percent in the third quarter, beating previous expectations of $48.2 billion increase. Real personal disposable income increased by 0.1%, an increase of 1.1 percentage points.
Personal savings were $815.4 billion in the third quarter, beating previous expectations of $51.0 billion in increase. Personal savings as a percentage of personal disposable income was 4.0%, an increase of 0.2 percentage points.
In terms of GDP and corporate profits, real GDP increased by 1.5% in the third quarter, compared to a 0.5% increase in the second quarter. Real average GDP and real GDP index increased by 3.3% in the third quarter, compared to a 1.3% increase in the second quarter.
Corporate profits from current production rose $105.7 billion in the third quarter, compared with a $6.9 billion increase in the second quarter. Profits from domestic financial companies increased by $18.8 billion, following a decline of $54.2 billion in the second quarter. Profits of domestic non-financial companies increased by $76.2 billion, following an increase of $39.0 billion. Profits in the rest of the world also increased by $10.7 billion, following an increase of $22.1 billion. In the third quarter, revenue increased by $17.4 billion and payments increased by $6.7 billion.
