1st LD Writethru: U.S. Q3 GDP growth revised up to annual rate of 5.2 pct

  • World
  • Thursday, 30 Nov 2023

WASHINGTON, Nov. 29 (Xinhua) -- The U.S. real gross domestic product (GDP) growth in the third quarter of this year was revised up to an annual rate of 5.2 percent, compared with 4.9 percent in the "advance" estimate, the Commerce Department reported on Wednesday.

The update primarily reflected upward revisions to nonresidential fixed investment and state and local government spending that were partly offset by a downward revision to consumer spending, according to the "second" estimate released by the Bureau of Economic Analysis.

Imports, which are a subtraction in the calculation of GDP, were revised down.

The increase in real GDP in the third quarter reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment.

The latest data marked an acceleration from the second quarter, when real GDP increased 2.1 percent. Looking ahead, growth could slow.

"Rebounding profits can be supportive of economic growth, but to the extent we see renewed pressure on margins in coming quarters, headcounts and thus broader growth may be at risk of slowing," Jay Bryson and Shannon Grein, economists at Wells Fargo Securities, wrote in an analysis.

"Recession risks are elevated, but a downturn is far from a certain outcome particularly in an environment of rebounding profits growth," they said.

The economists noted that even though real GDP growth was revised higher, real income growth continued to lag. Real gross domestic income (GDI) grew only 1.5 percent in the third quarter on a sequential basis. On a year-over-year basis, real GDP was up 3.0 percent while real GDI was down 0.2 percent.

According to the World Economic Outlook released by the International Monetary Fund (IMF), U.S. growth is projected at 2.1 percent in 2023 and 1.5 percent in 2024.

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