Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “advance” estimate. In the second quarter, real GDP increased 2.1 percent. The increase in the third quarter primarily reflected increases in consumer spending and inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
• The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors were housing and utilities, health care, financial services and insurance, and food services and accommodations. Within goods, the leading contributors to the increase were other nondurable goods (led by prescription drugs) as well as recreational goods and vehicles
• The increase in inventory investment primarily reflected increases in manufacturing and retail trade.
Compared to the second quarter, the acceleration in GDP in the third quarter primarily reflected accelerations in consumer spending, inventory investment, and federal government spending and upturns in exports and housing investment. These movements were partly offset by a downturn in business investment and a deceleration in state and local government spending. Imports turned up.
Gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased 3.0 percent in the third quarter after increasing 1.4 percent in the second quarter. Excluding food and energy, prices increased 2.7 percent after increasing 2.1 percent.
Personal consumption expenditures (PCE) prices increased 2.9 percent in the third quarter after increasing 2.5 percent in the second quarter. Excluding food and energy, the PCE “core” price index increased 2.4 percent after increasing 3.7 percent.
Personal income and saving
Real disposable personal income (DPI)—personal income adjusted for taxes and inflation—decreased 1.0 percent in the third quarter after increasing 3.5 percent in the second quarter.