Economic Growth Remains Strong
U.S. economic growth remains strong as the year ends. However, there is evidence that growth is slowing a bit.
Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018, according to the “third” estimate released by the government’s Bureau of Economic Analysis.
In the second quarter, real GDP increased 4.2 percent.
The increase in real GDP in the third quarter reflected positive contributions from PCE, private inventory investment, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the third quarter primarily reflected a downturn in exports and decelerations in nonresidential fixed investment and in PCE. Imports increased in the third quarter after decreasing in the second.
These movements were partly offset by an upturn in private inventory investment.
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $78.2 billion in the third quarter, compared with an increase of $65.0 billion in the second quarter.
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