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U.S. economy grows 2.8 percent in third quarter

Staff writer ▼ | November 7, 2013
The U.S. economy increased at an annual rate of 2.8 percent in the third quarter before the 16-day partial government shutdown, boosted by private inventories and residential fixed investment, the Commerce Department reported.
U.S. economy
U.S. economyThe U.S. economy increased at an annual rate of 2.8 percent in the third quarter before the 16-day partial government shutdown, boosted by private inventories and residential fixed investment, the Commerce Department reported.


This is a welcome acceleration from the 2.5 percent growth rate in the second quarter. In the first quarter, U.S. real gross domestic product (GDP) gained 1.1 percent.

Real personal consumption expenditures (PCE) rose 1.5 percent in the third quarter, compared with an increase of 1.8 percent in the second quarter, the report noted. Personal consumption accounts for about 70 percent of overall U.S. economic activity, making it the main engine of economic growth.

Private inventories contributed 0.83 percentage point to the quarterly GDP growth, more than the 0.41 percentage point contribution in the previous quarter, the report said. Net exports of goods and services contributed 0.31 percentage point to the quarterly GDP growth, after subtracting 0.07 percentage point from economic growth in the second quarter.

Against the backdrop of a housing sector recovery, residential fixed investment contributed 0.43 percentage point to the quarterly GDP growth, more than the 0.4 percentage point contribution in the prior quarter, according to the report.

Real federal government consumption expenditures and gross investment decreased 1.7 percent in the third quarter, after declining 1.6 percent in the second quarter. Real state and local government consumption expenditures and gross investment increased 1.5 percent, after rising 0.4 percent in the previous quarter, the department said.


 

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