Thursday, October 29, 2015

BEA: Real GDP increased at 1.5% Annualized Rate in Q3

by Bill McBride on 10/29/2015 08:37:00 AM

From the BEA: Gross Domestic Product: Third Quarter 2015 (Advance Estimate)

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 1.5 percent in the third quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.9 percent.
...
The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), state and local government spending, nonresidential fixed investment, exports, and residential fixed investment that were partly offset by negative contributions from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
emphasis added
The advance Q3 GDP report, with 1.5% annualized growth, was below expectations of a 1.7% increase.

Personal consumption expenditures (PCE) increased at a 3.2% annualized rate - a solid pace.   Residential investment (RI) increased at a 6.1% pace, and equipment investment at a 5.3% pace - both solid.  Domestic demand was solid.

The key negatives were investment in inventories (subtracted 1.44 percentage point) and investment in nonresidential structures (subtracted 0.11 percentage points).

I'll have more later ...