Real gross domestic product (GDP) increased at a seasonally adjusted annual rate of 2.8% for Q3 2013, according to a Commerce Department report (link opens as PDF) released today.
This "advance estimate" number roughly represents the growth in the U.S. from the second quarter to the third quarter. In this estimate, the third quarter managed to clock in ahead of Q2's 2.5% growth, as well as analyst expectations of 2% growth.
According to the report, the quarter's absolute GDP increase came primarily from increases in personal spending, private inventory investment, export, fixed investments, and state and local government spending. These gains were enough to outweigh contractions from federal government spending, as well as an uptick in imports (a negative number for GDP calculations).
Inventory expansion rates had the largest impact on GDP growth, and helped to offset a slowdown in exports (a positive number for GDP calculations). Analysts noted that much of the unforeseen strength came from a buildup in company inventories, suggesting that businesses overestimated consumer demand. Restocking contributed 0.8 percentage points to growth -- double its contribution in the second quarter.
This latest report also publishes inflation numbers via the GDP Price Index. Inflation grew at a seasonally adjusted annualized rate of 1.9%, a full 0.5 percentage points above analyst expectations.
The Federal Reserve's long-term inflation target is 2%, and its longer-run GDP growth rate estimates remain in the 2.3% to 2.5% range.
While this advance report is based on incomplete data, the second of three Q3 GDP estimates is scheduled to be released on Dec. 5.
-- Material from The Associated Press was used in this report.
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