Edited from Bloomberg News and
Strong demand and declines in inventories boosted factory productivity in the third quarter, fueling economic growth in excess of 3% for 10 straight quarters, the longest streak since 1986.
The Bureau of Economic Analysis today announced in its Gross Domestic Product and
Corporate Profits report that business inventories fell $13.4 billion, following a $1.7
billion decline in the second quarter and an increase of $58.2 billion in the first.
Inventories subtracted 0.44 percentage points from growth in the third quarter.
Business fixed investment, which includes spending on commercial construction as well as on equipment and software, rose at an 8.8% annual rate for a second straight quarter. The government estimated last month that fixed investment rose at a 6.2%. Spending on equipment and software rose 10.8%, compared with the 8.9% previously reported.
Final sales of computers contributed 0.17 percentage points to the third-quarter growth,
after contributing 0.32 percentage points to the second-quarter growth. Motor vehicle
output contributed 0.56 percentage points to the third-quarter growth, after subtracting
0.01 percentage points from the second-quarter growth.
Overall, GDP, the output of goods and services produced by labor and property located
in the United Statesgrew at a 4.3% annual rate, exceeding a 3.8% advance estimate.
This growth rate compares with a 3.3% increase in GDP in the second quarter.
GDP rose to $11.2 trillion when annualized and adjusted for inflation. Without
adjustment, the economy grew at a 7.4% annual pace to $12.6 trillion for the quarter.
A bigger trade gap restrained growth in the quarter. The gap subtracted 0.25 percentage points to GDP. In the initial estimate, the government reported that trade added 0.8 percentage point to economic growth. Corporate spending will probably help power the economy this quarter and next year, economists said. Economists at Morgan Stanley yesterday boosted their forecast for economic growth this quarter to a 3.8 percent annual rate from 3.1 percent after the durable goods report showed an increase in sales of business equipment and a rise in inventories.