US Economy expands less than expected in the third quarter of the year

0ct. 29, 2015 (Allthingsforex.com) – In its preliminary estimate released today, the Bureau of Economic Analysis said that the pace of expansion in the world’s largest economy slowed to 1.5% compared with 3.9% in the second quarter of 2015. Read the official press release here.

“Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 1.5 percent in the third quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis.

In the second quarter, real GDP increased 3.9 percent. The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 2 and “Comparisons of Revisions to GDP” on page 4). The “second” estimate for the third quarter, based on more complete data, will be released on November 24, 2015. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), state and local government spending, nonresidential fixed investment, exports, and residential fixed investment that were partly offset by negative contributions from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased. Real GDP increased 1.5 percent in the third quarter, after increasing 3.9 percent in the second. The deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and decelerations in exports, in nonresidential fixed investment, in PCE, in state and local government spending, and in residential fixed investment that were partly offset by a deceleration in imports.

FOOTNOTE

Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2009) dollars. Price indexes are chain-type measures. Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 1.5 percent in the third quarter, compared with an increase of 3.6 percent in the second. Current-dollar GDP — the market value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production — increased 2.7 percent, or $121.1 billion, in the third quarter to a level of $18,034.8 billion. In the second quarter, current-dollar GDP increased 6.1 percent, or $264.4 billion. Disposition of personal income Current-dollar personal income increased $171.6 billion in the third quarter, compared with an increase of $139.5 billion in the second. The acceleration in personal income primarily reflected an acceleration in wages and salaries and an upturn in farm proprietors’ income that were partly offset by a deceleration in personal interest income. Personal current taxes increased $15.8 billion in the third quarter, compared with an increase of $27.3 billion in the second. Disposable personal income increased $155.9 billion, or 4.8 percent, in the third quarter, compared with an increase of $112.2 billion, or 3.4 percent, in the second. Real disposable personal income increased 3.5 percent, compared with an increase of 1.2 percent. Personal outlays increased $136.6 billion in the third quarter, compared with an increase of $182.3 billion in the second. Personal saving — disposable personal income less personal outlays — was $636.7 billion in the third quarter, compared with $617.5 billion in the second. The personal saving rate — personal saving as a percentage of disposable personal income — was 4.7 percent in the third quarter, compared with an increase of 4.6 percent in the second.”

 



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