The U.S. Commerce Department released its third quarter estimate for the real gross domestic product (GDP), showing an increased annual rate of 33.1 percent. This was an “advance” estimate released by the Bureau of Economic Analysis (BEA).
“Economic growth rebounded strongly in the third quarter, with multiple segments of the economy – after a sharp plunge in the second quarter – showing strong growth,” Mike Fratantoni, Mortgage Bankers Association (MBA) senior vice president and chief economist, said in a release.
This increase was preceded by a 31.4 percent decrease in the second quarter of 2020. The third quarter increase can be attributed to “increases in personal consumption expenditures, private inventory investment, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending…and state and local government spending,” the BEA report stated.
“Expressed as an annual rate, consumer spending on durable goods was up more than 80 percent, business spending on equipment increased more than 70 percent, residential investment increased almost 60 percent, and both exports and imports of goods were up over 100 percent,” Fratantoni said. “The data show a picture of an economy re-opening and restocking over the summer.
“The third quarter growth is consistent with the gains we have seen in the job market,” Fratantoni continued. “MBA expects that the pace of economic growth will slow in the fourth quarter and into next year, but expansion should nonetheless continue, provided the current spike in virus cases does not lead to another complete lockdown.”
The estimate was based on source data that are incomplete or subject to further revision by the source agency, according to the BEA. A second report based on more complete data will be available later this month.