In the third quarter of 2023, the United States experienced a notable surge in its real gross domestic product (GDP), growing at an annual rate of 4.9%, as revealed by the advance estimate released by the Bureau of Economic Analysis. This marks a significant acceleration compared to the 2.1% increase in real GDP recorded in the second quarter.
The upswing in real GDP was driven by positive trends across various sectors of the economy. Consumer spending, private inventory investment, exports, state and local government spending, federal government spending, and residential fixed investment all contributed to the overall growth. However, this positive momentum was somewhat offset by a decrease in nonresidential fixed investment, while imports, subtracted in the GDP calculation, saw an increase.
Consumer spending, a crucial component of economic activity, saw increases in both services and goods. Key contributors within services included housing and utilities, health care, financial services and insurance, and food services and accommodations. Among goods, other nondurable goods (especially prescription drugs) and recreational goods and vehicles played a significant role.
Private inventory investment witnessed growth, propelled by increases in manufacturing and retail trade. However, nonresidential fixed investment experienced a downturn, primarily due to a decrease in equipment, although this was partially offset by increases in intellectual property products and structures.
When compared to the second quarter, the acceleration in real GDP in the third quarter was driven by faster growth in consumer spending, private inventory investment, and federal government spending. Additionally, upturns in exports and residential fixed investment contributed to this economic expansion. Nevertheless, there was a downturn in nonresidential fixed investment and a deceleration in state and local government spending, partially mitigating the overall growth. Imports also saw an increase during this period.
