Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 2.0 percent in the third quarter of 2010,
(that is, from the second quarter to the third quarter), according to the "advance" estimate released by
the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.
The Bureau emphasized that the third-quarter advance estimate released today is based on source
data that are incomplete or subject to further revision by the source agency (see the box on page 3).
The "second" estimate for the third quarter, based on more complete data, will be released on November 23,
2010.
The increase in real GDP in the third quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), private inventory investment, nonresidential fixed
investment, federal government spending, and exports that were partly offset by a negative contribution
from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The small acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in
imports and accelerations in private inventory investment and in PCE that were partly offset by a
downturn in residential fixed investment and decelerations in nonresidential fixed investment and in
exports.
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FOOTNOTE. -- Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent
changes are calculated from unrounded data and are annualized. Real estimates are in chained (2005)
dollars. Price indexes are chain-type measures.
This news release is available on BEAs Web site along with the Technical Note and Highlights
related to this release.
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Motor vehicle output added 0.42 percentage point to the third-quarter change in real GDP after
subtracting 0.06 percentage point from the second-quarter change. Final sales of computers added 0.25
percentage point to the third-quarter change in real GDP after adding 0.03 percentage point to the
second-quarter change.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 0.8 percent in the third quarter, compared with an increase of 0.1 percent in the second.
Excluding food and energy prices, the price index for gross domestic purchases increased 0.6 percent in
the third quarter, compared with an increase of 0.8 percent in the second.
Real personal consumption expenditures increased 2.6 percent in the third quarter, compared
with an increase of 2.2 percent in the second. Durable goods increased 6.1 percent, compared with an
increase of 6.8 percent. Nondurable goods increased 1.3 percent, compared with an increase of 1.9
percent. Services increased 2.5 percent, compared with an increase of 1.6 percent.
Real nonresidential fixed investment increased 9.7 percent in the third quarter, compared with an
increase of 17.2 percent in the second. Nonresidential structures increased 3.9 percent, in contrast to a
decrease of 0.5 percent. Equipment and software increased 12.0 percent, compared with an increase of
24.8 percent. Real residential fixed investment decreased 29.1 percent, in contrast to an increase of 25.7
percent.
Real exports of goods and services increased 5.0 percent in the third quarter, compared with an
increase of 9.1 percent in the second. Real imports of goods and services increased 17.4 percent,
compared with an increase of 33.5 percent.
Real federal government consumption expenditures and gross investment increased 8.8 percent
in the third quarter, compared with an increase of 9.1 percent in the second. National defense increased
8.5 percent, compared with an increase of 7.4 percent. Nondefense increased 9.6 percent, compared
with an increase of 12.8 percent. Real state and local government consumption expenditures and gross
investment decreased 0.2 percent, in contrast to an increase of 0.6 percent.
The change in real private inventories added 1.44 percentage points to the third-quarter change in
real GDP after adding 0.82 percentage point to the second-quarter change. Private businesses increased
inventories $115.5 billion in the third quarter, following increases of $68.8 billion in the second quarter
and $44.1 billion in the first.
Real final sales of domestic product -- GDP less change in private inventories -- increased 0.6
percent in the third quarter, compared with an increase of 0.9 percent in the second.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 3.9 percent in the third quarter, compared with an increase of 5.1 percent in the
second.
Disposition of personal income
Current-dollar personal income increased $65.7 billion (2.1 percent) in the third quarter,
compared with an increase of $123.5 billion (4.1 percent) in the second.
Personal current taxes increased $22.3 billion in the third quarter, compared with an increase of
$2.6 billion in the second.
Disposable personal income increased $43.4 billion (1.5 percent) in the third quarter, compared
with an increase of $120.9 billion (4.4 percent) in the second. Real disposable personal income
increased 0.5 percent, compared with an increase of 4.4 percent.
Personal outlays increased $85.2 billion (3.2 percent) in the third quarter, compared with an
increase of $59.8 billion (2.3 percent) in the second. Personal saving -- disposable personal income less
personal outlays -- was $631.0 billion in the third quarter, compared with $672.8 billion in the second.
The personal saving rate -- saving as a percentage of disposable personal income -- was 5.5 percent in
the third quarter, compared with 5.9 percent in the second. For a comparison of personal saving in
BEAs national income and product accounts with personal saving in the Federal Reserve Boards flow
of funds accounts and data on changes in net worth, go to /national/nipaweb/Nipa-
Frb.asp.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
4.2 percent, or $151.5 billion, in the third quarter to a level of $14,730.2 billion. In the second quarter,
current-dollar GDP increased 3.7 percent, or $132.3 billion.
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BOX. -- Information on the assumptions used for unavailable source data is provided in a technical
note that is posted with the news release on BEA's Web site. Within a few days after the release,
a detailed "Key Source Data and Assumptions" file is posted on the Web site. In the middle of each
month, an analysis of the current quarterly estimate of GDP and related series is made available
on the Web site; click on Survey of Current Business, "GDP and the Economy."
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BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the
site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.
* * *
Next release -- November 23, 2010, at 8:30 A.M. EST for:
Gross Domestic Product: Third Quarter 2010 (Second Estimate)
Corporate Profits: Third Quarter (Preliminary Estimate)
* * *
Comparisons of Revisions to GDP
Quarterly estimates of GDP are released on the following schedule: the advance estimate, based on
source data that are incomplete or subject to further revision by the source agency, is released near the end of the
first month after the end of the quarter; as more detailed and more comprehensive data become available,
the second and third estimates are released near the end of the second and third months, respectively. The
latest estimate reflects the results of both annual and comprehensive revisions.
Annual revisions, which cover the quarters of the 3 most recent calendar years, are usually carried out
each summer and incorporate newly available major annual source data. Comprehensive (or benchmark)
revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as
improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S.
economy.
The table below shows comparisons of the revisions between quarterly percent changes of current-dollar
and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one
month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the
advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to
the latest estimate, the average revision without regard to sign is 1.2 percentage points. The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is larger than
the average revisions from the advance estimate to the second or to the third estimates. The larger average
revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as
the incorporation of BEAs latest benchmark input-output accounts. The quarterly estimates correctly indicate the
direction of change of real GDP 98 percent of the time, correctly indicate whether GDP is accelerating or
decelerating 74 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend
growth more than three-fifths of the time.
Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons
[Annual rates]
Vintages Average Average without Standard deviation of
compared regard to sign revisions without
regard to sign
____________________________________________________Current-dollar GDP_______________________________________________
Advance to second.................... 0.2 0.5 0.4
Advance to third..................... .2 .7 .4
Second to third...................... .0 .3 .2
Advance to latest.................... .4 1.2 .9
________________________________________________________Real GDP_____________________________________________________
Advance to second.................... 0.1 0.5 0.4
Advance to third..................... .1 .6 .4
Second to third...................... .0 .2 .2
Advance to latest.................... .3 1.3 1.0
NOTE.--These comparisons are based on the period from 1983 through 2007.
