GDP Growth in the Third Quarter, Third Estimate – Growth That Matters

Eye on Housing

The Bureau of Economic Analysis (BEA) released the third estimate of real GDP growth for the third quarter of 2013. Real GDP growth was revised upward to a seasonally adjusted annual rate of 4.1%, from the second estimate of 3.6%. Real GDP grew at annual rate of 2.5% in the second quarter and 1.1% in the first quarter.

The first (or advance) estimate of real GDP growth was 2.8% and the second estimate was revised up to 3.6%, but that higher growth was somewhat misleading because it was heavily (almost exclusively) concentrated in inventory investment. That’s bad because it’s not just a one-time thing, in this case it’s likely to reversed in subsequent quarters because the push up was unsustainably large. The upward revision from 3.6% to 4.1% in today’s report is good news because it’s the right kind of growth: growth in personal consumption expenditures (PCE) and business fixed…

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