The Bureau of Economic Analysis reported an annual rate of 4.9% in real GDP in the third quarter of 2023, compared to 2.1% in the second quarter. This expansion was driven in part by expenditure on consumer products, private inventory investment, exports, government spending at all levels (federal, state, and local), as well as residential fixed investment. In addition to it, imports increased.
The rising cost of housing and utilities, the rising cost of medical care, the rising cost of financial and insurance fees, the rising cost of sales at restaurants and takeaway businesses, and the rising cost of entertainment have all contributed to the rise in consumer spending. The increase in private inventory investment was seen in both the manufacturers and the retailers. Reductions in equipment led to a fall in non-residential fixed investment, which was somewhat offset by increases in the production of intellectual property items and building construction.
Increases in consumer spending, private inventory investment, and federal government spending drove real GDP growth in the third quarter when compared to the previous quarter. Increases in exports and residential fixed investment were partially offset by decreases in nonresidential fixed investment and slowdowns in state and local government spending. Overall, real GDP growth in the third quarter was higher than in the previous quarter. In addition to it, imports increased.
The yearly growth rate of the gross domestic product was 8.5%, bringing it to a total of $27.62 trillion in current dollars. The price index for gross domestic purchases increased by 3.0% during the third quarter, while the price index for personal consumption expenditures increased by 2.9%. Rising remuneration, proprietors' income, personal income receipts on assets, and rental revenue were the primary contributors to the increase of $199.5 billion in personal income that occurred during the third quarter. The real amount of personal disposable income declined by 1.0% despite a 1.9% increase in nominal personal disposable income. The rate of personal savings dropped from 5.2% in the second quarter to 3.8% in the third quarter, with personal savings amounting to a total of $776.9 billion over this time period. You can access additional data that the Bureau of Economic Statistics has made available to the public by clicking on this link.
