Advanced GDP Estimate Third Quarter 2017

Economic output advanced at an inflation-adjusted 3.0 percent annualized rate from July through September 2017 according to gross domestic product (GDP) figures from the Bureau of Economic Analysis. While there will be at least two more attempts to quantify output for this period, the early estimate shows output decelerated from the previous quarter’s growth rate of 3.1 percent. This is the first time since the third quarter of 2014 that output has grown by at least 3.0 percent in two consecutive periods.

This recent increase in real (i.e. inflation-adjusted) GDP reflects growth in most segments of the economy. Personal consumption expenditures (the largest component of American output) increased 2.4 percent, slower than the previous period’s 3.3 percent uptick. Domestic investment was strong, rising 6.0 percent versus 3.9 percent in the second quarter, partly caused by accelerating inventories and intellectual property products. Falling state and local government outlays partially offset increased Federal spending. Both components of trade (imports and exports) slowed.

America’s economic upswing continues. While there was a mild deceleration compared to the second quarter, these two periods represent the best six-months of growth in three years. Of course, there will be revisions to the report as more complete data become available, so the headline figure is likely to change, but it should continue to demonstrate the current expansion's footing remains firm.