Business Investment and Consumer Spending Lifted GDP, Increased 3.4% in Third Quarter
Growth picked up in third quarter
GDP, which measures the value of goods and services produced across the economy, rose at a seasonally and inflation-adjusted annual rate of 3.4 percent, the Commerce Department said Thursday. The increase followed 2.2 percent growth in the second quarter.
Private demand strengthened
Real final sales to domestic private purchasers, a gauge of underlying U.S. demand, grew at a 4.9 percent pace. That was up from 4.6 percent in the prior quarter and the strongest reading since the second quarter of 2021. Consumer spending rose 3.8 percent, matching its prior-quarter rate and exceeding expectations of 3.5 percent.
Housing and inflation measures
Residential investment declined at a 3.3 percent annualized rate, amid weakness in the housing market. The personal consumption expenditures price index rose at a seasonally adjusted annual rate of 2.1 percent.
Core PCE prices, which exclude food and energy, increased at a 2.5 percent pace. Nominal GDP, which does not account for inflation, expanded at an annualized rate of 5.6 percent.
Key points
- GDP grew at a 3.4 percent annual rate in the third quarter, up from 2.2 percent in the second.
- Underlying private domestic demand increased 4.9 percent, its fastest pace since the second quarter of 2021.
- Business investment rose 12.7 percent, while consumer spending grew 3.8 percent.
- Residential investment fell 3.3 percent as housing remained weak.