The U.S. economy grew at an annual rate of 2.8 percent in the third quarter of 2024, according to the "second" estimate released by the Bureau of Economic Analysis (BEA). This matches last month's initial estimate and shows a slight slowdown from the 3 percent growth reported in Q2 2024.
Increases in consumer spending, exports, federal government spending, and non-residential fixed investment drove the expansion of GDP in the third quarter. But a downturn in private inventory investment and a larger decline in residential fixed investment contributed to a lower pace of growth compared to the previous quarter.
Revised data also revealed downward adjustments to exports and consumer spending, while imports—which are subtracted from GDP—accelerated. On the positive side, upward revisions to private inventory investment and nonresidential fixed investment partially offset these trends.
Current-dollar GDP increased by 4.7 percent, or $337.6 billion, in Q3 2024, reaching a total of $29.35 trillion, with revisions showing an upward adjustment of $4.4 billion from earlier estimates. Meanwhile, the price index for gross domestic purchases rose by 1.9%, slightly higher than the 1.8 percent reported previously. The personal consumption expenditures (PCE) price index, a key inflation measure, held steady at 1.5%, while the core PCE index excluding food and energy saw a minor downward revision to 2.1 percent.
Personal income saw slower growth in Q3, with current-dollar personal income rising by $175.9 billion, down from earlier estimates. Real disposable personal income grew by 0.8 percent, revised down by 0.8 percentage points. The personal saving rate also fell to 4.3 percent, reflecting a 0.5 percentage point downward revision.
Corporate profits declined in the third quarter, with profits from current production falling by $10.2 billion, in stark contrast to the $132.5 billion increase in Q2 2024. The decrease was driven by a drop in profits for domestic financial corporations and reduced rest-of-the-world profits, even as domestic nonfinancial corporations posted modest gains.
Real gross domestic income (GDI) increased by 2.2% in Q3, compared to 2.0% growth in Q2. The average of real GDP and real GDI, which provides a more balanced view of economic activity, rose by 2.5%, maintaining the same growth rate as the previous quarter.
The BEA's updated data highlights a mix of economic strengths and weaknesses, with notable adjustments to private inventory investment, nonresidential fixed investment, and state and local government spending. However, downward revisions to key areas like consumer spending and federal government expenditures indicate challenges ahead.
The final estimate for third-quarter GDP will be released in December, providing further clarity on the U.S. economy’s performance as it heads into the final quarter of 2024.
Source: U.S. Bureau of Economic Analysis