Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “third” 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 goods and services. Within goods, the leading contributors to the increase were recreational goods and vehicles as well as other nondurable goods (led by pharmaceutical products). Within services, the leading contributors were housing and utilities, food services and accommodations, and health care.
- The increase in inventory investment primarily reflected increases in manufacturing, wholesale trade, and retail trade.
Compared to the second quarter, the acceleration in GDP in the third quarter primarily reflected an upturn in exports and accelerations in consumer spending and inventory investment. These movements were partly offset by a deceleration in business investment. Imports turned up.
Updates to GDP
The update from the “second” estimate reflected downward revisions to consumer spending, inventory investment, and exports that were partly offset by upward revisions to state and local government, business investment, housing investment, and federal government spending. Imports were revised down. For additional details on the estimates, refer to the Technical Note.
Prices
Gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased 2.9 percent in the third quarter after increasing 1.4 percent in the second quarter. Excluding food and energy, prices increased 2.5 percent after increasing 2.1 percent.
Personal consumption expenditures (PCE) prices increased 2.6 percent in the third quarter after increasing 2.5 percent in the second quarter. Excluding food and energy, the PCE “core” price index increased 2.0 percent after increasing 3.7 percent.
Personal income and saving
Real disposable personal income (DPI)—personal income adjusted for taxes and inflation—increased 0.3 percent in the third quarter after increasing 3.3 percent in the second quarter.
Current-dollar DPI increased 2.9 percent in the third quarter, following an increase of 5.8 percent in the second quarter. The increase in the third quarter reflected increases in compensation, proprietors’ income, and rental income of persons that were partly offset by a decrease in personal current transfer receipts. Personal current taxes, a subtraction in the calculation of DPI, increased in the third quarter.
Personal saving as a percentage of DPI was 4.2 percent in the third quarter, compared with 5.1 percent in the second quarter.
Corporate profits from current production
Profits increased 3.4 percent at a quarterly rate in the third quarter after increasing 0.2 percent in the second quarter.
- Profits of domestic financial corporations increased 2.0 percent after decreasing 10.9 percent.
- Profits of domestic nonfinancial corporations increased 4.1 percent after increasing 1.8 percent.
- Profits from the rest of the world (net) increased 1.7 percent after increasing 4.5 percent.
Corporate profits decreased 0.6 percent in the third quarter from one year ago.
Real gross domestic product by industry
In the third quarter, the value added of private goods-producing industries increased 10.2 percent, private services-producing industries increased 4.1 percent, and government increased 2.0 percent. Overall, 14 of 22 industry groups contributed to the third-quarter increase in real GDP.
- Within private goods-producing industries, the increase was led by nondurable goods manufacturing and construction.
- Within private services-producing industries, the increase was led by retail trade, information, and finance and insurance. Partly offsetting these increases was a decrease in utilities.
- The increase in government reflected an increase in state and local government that was partly offset by a decrease in federal government.
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