Commerce downgrades Q3 2017 U.S. GDP estimate

U.S. gross domestic product (GDP) grew at an annual rate of 3.2 percent during the third quarter, according to the Department of Commerce’s Bureau of Economic Analysis (BEA), down from 3.3 percent in the bureau’s second estimate released last month.    The Department of Commerce’s Bureau of Economic Analysis (BEA) has downgraded its third quarter 2017 estimate for U.S. gross domestic product growth by one-tenth of a percentage point, citing “more complete source data.”
   Real gross domestic product actually increased at an annual rate of 3.2 percent in the third quarter, according to a “third” estimate by the bureau, compared with 3.3 percent in BEA’s second analysis released last month.
   In the second quarter, real GDP increased 3.1 percent, according to BEA.
   “The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month,” the Bureau explained in its updated analysis. “In the second estimate, the increase in real GDP was 3.3 percent.”
   “With this third estimate for the third quarter, personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the same,” the Bureau said in its statement.
   The price index for gross domestic purchases increased 1.7 percent in the third quarter, according to the Bureau’s findings, compared with a 0.9 percent increase in the second quarter. The personal consumption expenditures (PCE) price index increased 1.5 percent, compared with an increase of 0.3 percent.
   Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 0.9 percent, the economic analysis shows.
   The revised analysis also found that real gross domestic income (GDI) increased 2.0 percent in the third quarter, compared with an increase of 2.3 percent in the second. The average of real GDP and real GDI – a supplemental measure of U.S. economic activity that equally weights GDP and GDI – rose 2.6 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter.
   “The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, exports, federal government spending and state and local government spending that were partly offset by a negative contribution from residential fixed investment,” the bureau explained. “Imports, which are a subtraction in the calculation of GDP, decreased.”
   In addition, the most recent data from Commerce indicates new orders for durable goods in November 2017 grew 1.3 percent to $241.4 billion following a revised 0.4 percent decrease in October. The November increase in durable goods orders was the third in four months.
   Commerce’s Census Bureau noted that transportation equipment, also up three of the last four months, drove the increase, rising 4.2 percent to $80.9 billion for the month. Excluding orders for transportation equipment, total durable goods orders slipped 0.1 percent in November.
   Shipments of manufactured durable goods, now up in six of the last seven months, ticked up 1 percent to $244.5 billion in November following a 0.5 percent uptick the previous month.