Foodservice Equipment Reports

U.S. GDP Grows 2% In Third Quarter, Ahead Of Estimates

It can hardly be termed robust, but real growth of gross domestic product in the U.S. came in at 2% in the third quarter on an annualized basis, according to the advanced estimate released Oct. 26 by the Department of Commerce’s Bureau of Economic Analysis. The gain, stronger than many economists had expected, was driven by increased spending by consumers on both goods and housing, and by the federal government, especially for defense. In comparison, the consensus GDP forecast for the third quarter by Blue Chip Economic Indicators was 1.7%.

The increase follows a 1.3% gain in the second quarter and a 2% uptick in the first quarter of this year. The increase remains well below the 2.5% to 3% needed to drive significant jobs gains.

Real personal consumption rose 2% in real terms, up from an increase of only 1.5% in the second quarter. Spending on durable goods jumped 8.5% while that for nondurables, including foodservice, rose 2.4%. The increased spending came in spite of very weak growth of only 0.8% in real disposable income during the quarter.

Real federal spending and investment rose 9.6%, including a 13% gain for defense. It was the first gain in federal spending in eight quarters. State and local spending continued to fall, though it was down only 0.1% in the quarter.

On the other hand, nonresidential fixed investment and spending by business for facilities, computers and software, fell during the quarter for the first time in more than a year.

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