Real gross domestic product – the value of the production of goods and services in the U.S., adjusted for price changes – increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.
The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the third quarter, compared with an increase of 2 percent in the second. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent, compared with an increase of 1.7 percent.
The Bureau emphasized that the third-quarter advance estimate is based on source data that are incomplete or subject to further revision by the source agency. The second estimate for the third quarter, based on more complete data, will be released on Nov. 25, 2014.
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