GDP growth, highest for the year, beats expectations
The U.S. economy grew 2.8 percent in the third quarter (July, August and September), outpacing the 2 percent growth many economists had predicted and coming in as the fastest growth quarter for the year.
GDP in the first quarter of this year was 1.1 percent; in the second, it was 2.5 percent. Economists expect fourth quarter growth to hover around 2.4 percent. Since the beginning of the recovery in 2009, 2.25 percent has been the average rate of growth. GDP measures the value of all goods and services produced during each three-month quarter.
Thursday’s Commerce Department release, delayed by the government shutdown, points to a large increase in inventories for the higher GDP growth. It’s the biggest increase in inventories since the first three months of 2012.
But when inventories are excluded, growth was only 2 percent. And growth in consumer spending, which makes up two-thirds of economic activity, was only 1.5 percent — the slowest since early 2011. Business spending growth also slowed.
The release of October’s jobs data Friday, once again delayed from the government shutdown, will give economists another sense of how much households are liking to be spending going into the holiday season. Be sure to check out our unemployment report — “the Solman Scale” — here on the Rundown Friday.