Real gross domestic product (GDP) increased 2.7 percent in the third quarter of 2012 after increasing 1.3 percent in the second quarter, according to estimates released today by the Bureau of Economic Analysis. The third-quarter growth rate was revised up 0.7 percentage point from the advance estimate released in October.
Real GDP third-quarter highlights
The acceleration in third-quarter growth was mainly driven by a rebound in inventory investment. Nonfarm inventory investment turned up. In contrast, farm inventory investment declined more than in the second quarter, reflecting the drought in the Midwest.
In addition, consumer spending on durable goods turned up, notably on motor vehicles and parts. Federal government spending on national defense turned up. And residential housing accelerated, as investment in single-family structures picked up.
Offsetting these contributions to real economic growth, consumer spending on services slowed, and business investment turned down, as spending on equipment and software and on nonresidential structures declined.
Revisions to GDP
The upward revision to real GDP growth in the third quarter of 2012 mainly reflected a large upward revision to private inventory investment, mostly in manufacturing and wholesale trade. In addition, goods exports was revised up, partly reflecting a revision to industrial supplies and materials. In contrast, consumer spending on both goods and services was revised down. Business investment was also revised down, reflecting a revision to equipment and software.
For more information, see the technical note.
BEA released its preliminary estimate of third-quarter corporate profits. Profits accelerated in the third quarter, rising 3.5 percent at a quarterly rate after rising 1.1 percent in the second quarter.
Profits of financial corporations rose 18.3 percent, while profits of nonfinancial corporations fell 0.1 percent. Profits from the rest of the world decreased 0.6 percent.
For more, here’s the full report.