Real gross domestic product (GDP) increased at an annual rate of 5.2 percent in the third quarter of 2023, according to the “second” estimate. In the second quarter, real GDP increased 2.1 percent. The increase in the third quarter primarily reflected increases in consumer spending and inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
- The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors were housing and utilities, food services and accommodations, and health care. Within goods, the leading contributors to the increase were recreational goods and vehicles as well as other nondurable goods (led by prescription drugs).
- The increase in inventory investment primarily reflected increases in wholesale trade, manufacturing, and retail trade.
Compared to the second quarter, the acceleration in GDP in the third quarter primarily reflected accelerations in consumer spending and inventory investment and an upturn in exports. These movements were partly offset by a deceleration in business investment. Imports turned up.
Prices
Gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased 3.0 percent in the third quarter after increasing 1.4 percent in the second quarter. Excluding food and energy, prices increased 2.7 percent after increasing 2.1 percent.
Personal consumption expenditures (PCE) prices increased 2.8 percent in the third quarter after increasing 2.5 percent in the second quarter. Excluding food and energy, the PCE “core” price index increased 2.3 percent after increasing 3.7 percent.
Personal income and saving
Real disposable personal income (DPI)— personal income adjusted for taxes and inflation—increased 0.1 percent in the third quarter after increasing 3.3 percent (revised) in the second quarter.
Current-dollar DPI increased 2.9 percent in the third quarter, following an increase of 5.8 percent (revised) in the second quarter. The increase in the third quarter reflected increases in compensation, proprietors’ income, and personal income receipts on assets that were partly offset by an increase in personal current taxes.
Personal saving as a percentage of DPI was 4.0 percent in the third quarter, compared with 5.1 percent (revised) in the second quarter.
Corporate profits from current production
Profits increased 3.3 percent at a quarterly rate in the third quarter after increasing 0.2 percent in the second quarter.
- Profits of domestic financial corporations increased 4.2 percent after decreasing 10.9 percent.
- Profits of domestic nonfinancial corporations increased 3.4 percent after increasing 1.8 percent.
- Profits from the rest of the world (net) increased 2.1 percent after increasing 4.5 percent.
Corporate profits decreased 0.7 percent in the third quarter from one year ago.
Updates to GDP
The update from the “advance” estimate reflected upward revisions to business investment, state and local government spending, housing investment, inventory investment, and federal government spending that were partly offset by downward revisions to consumer spending and exports. Imports were revised down.
For more information, read the full release.