GDP, other economic gauges revive

Real gross domestic product out-performed economists’ expectations, raising 3.9% in the third quarter, after economists in a Bloomberg survey predicted a 3.1% increase. Real GDP—the output of goods and services produced by labor and property in the United States—increased at an annual rate of 3.9%, higher than last quarter’s 3.8%, the Bureau of Economic Analysis released today. Today’s advance third quarter estimates will be revised and re-released at the end of November. Bloomberg’s survey of 82 financial firms prior to the Commerce Department’s official release showed that economists expected the GDP to decrease from the third quarter, with an average estimate of 3.1%. The high forecast was 4% and the low was 2%. The increase in real GDP reflected an upswing in personal consumption expenditures, federal government spending, and other consumer spending, the BEA said. Further advances were offset by a decrease in residential fixed investment and a slowdown in nonresidential structures —t he remnants of the recent credit crisis that economists in the Bloomberg survey expected to have a more significant impact, Bloomberg reported. The price index for gross domestic purchases—prices paid by U.S. residents excluding food and energy prices—increased 1.7% in the third quarter compared to last quarter’s 1.5%, the BEA said. Economists surveyed by Bloomberg predicted an average price index of 1.8%, with a high forecast of 3.2% and low of 0.7%. Current-dollar GDP—the market value of the U.S.’s output of goods and services—increased 4.7%, $157.9 billion, in the third quarter, compared to 6.6%, $216.9 billion, last quarter, the BEA said. The BEA will release preliminary gross domestic product and corporate profits for the third quarter on Nov. 29.