U.S. gross domestic product increased 2.9 percent in the third quarter of 2016, according to the “advance” estimate from the Department of Commerce, following a revised increase of 1.4 percent in the second quarter.
United States gross domestic product (GDP) – the broadest measure of a nation’s overall economic health – grew 2.9 percent during third quarter 2016, according to the “advance” estimate from the Department of Commerce, up from a revised 1.4 percent growth rate in the second quarter and a 0.8 percent advance in the first quarter.
GDP is a calculation of the value of the goods and services produced by a nation’s economy minus the value of the goods and services used up in production.
The 2.9 percent growth rate in Q3 was the strongest since third quarter 2014, beating analyst expectations of a 2.5 percent expansion pace, according to a report from Reuters news service.
The department’s Bureau of Economic Analysis (BEA) said the acceleration in GDP growth reflected increases in private inventory investment, exports, and federal government spending, as well as a smaller decrease in state and local government spending, which were partly offset by a smaller increase in personal consumption expenditures, and a larger increase in imports, which are a subtraction in the calculation of GDP.
Real exports of goods and services shot up 10 percent in the third quarter, according to BEA, compared with a 1.8 percent increase in the second quarter. Meanwhile, imports grew 2.3 percent, compared with a 0.2 percent increase the previous quarter.
U.S. export growth had been held in check largely by a strong dollar, which makes U.S. exports more expensive and, therefore, less desirable abroad, as well as declining demand in China and Europe, but were led by a massive surge in soybean exports during Q3 2016.
By contrast, additional new data from Commerce regarding the U.S. manufacturing sector indicates the economy is still struggling to make meaningful headway in the third quarter.
Following a revised increase for two consecutive months, new orders for durable goods in September remained virtually unchanged, slipping just 0.1 percent (about $300 million) to $227.3 billion.
Durable goods orders increased a revised 0.3 percent in August and 3.6 percent in July after falling 4.2 percent and 2.8 percent in June and May, respectively.
Census noted that transportation equipment, also down following two consecutive monthly increases, drove the slight decrease in durable goods orders, falling 0.8 percent to $77.5 billion for the month. Excluding orders for transportation equipment, total durable goods orders inched up 0.2 percent.
Shipments of manufactured durable goods, up in three of the last four months, ticked up 0.8 percent to $234.5 billion in September following two consecutive monthly increases.
U.S. economy on the upswing after sluggish first half
