New: GDP Hits 4.9% in Q3, Annualized

Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of
2023 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent.

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The GDP estimate released today is based on source data that are incomplete or subject to further
revision by the source agency (refer to “Source Data for the Advance Estimate” on page 2). The “second” estimate for the third quarter, based on more complete data, will be released on November 29, 2023.

[Looks on the level, although certainly boosted by a 4.6% annualized increase in government spending, 6.2% at the federal level. Deficit spending is a big part of this number, but bear in mind that the government spending increases only added 0.8 points to the topline number. Consumer spending also rose 4% in Q3 (adding 2.69 points to the GDP number), and private business investment rose 8.4% too (1.47 points). Final sales of domestic product nearly doubled from Q2 to 7.2%, and final sales to domestic purchasers also nearly doubled to 6.7%. One big fly in the ointment, however, was the -1% decline in disposable personal income, which could signal a poorer Q4 to come. (All numbers adjusted for inflation.) — Ed]

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