Third Quarter GDP, A Downward Revision

Tue, 24 Nov 2009 14:00:08 +0000

The BEA has released the preliminary (or second estimate) GDP figures for the third quarter.  Compared to the advance estimates released at the end of last month, the annual growth rate is down from 3.5 to 2.8 percent.

The second estimate of the third-quarter increase in real GDP is 0.7 percentage point lower, or $23.7 billion, than the advance estimate issued last month, primarily reflecting an upward revision to imports and downward revisions to personal consumption expenditures and to nonresidential fixed investment that were partly offset by an upward revision to exports.

Taking stock of where we are, it is clear that the third quarter was heavily influenced by government spending at the federal level.  Some highlights:

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There was something of a rebound in residential fixed investment and equipment and software investment, which is where we would like to see the growth come from in a recovery.