US real gross domestic product (GDP) grew at a seasonally adjusted annual rate of 3.9% in the third quarter, the Bureau of Economic Analysis said Tuesday. The agency had previously estimated the third quarter's growth rate at 3.5%.
Gains in the past two quarters represent the best six-month stretch of growth since late 2003 - GDP grew at a 4.6% pace in the second quarter, following a first-quarter contraction.
Third-quarter highlights: The increase in GDP in the third quarter reflectedthe following:
- Consumer spending increased 2.2%. Spending on goods and services both increased.
- Business investment rose, notably equipment and intellectual property products.
- Federal government spending increased, mainly national defense spending.
- Exports of goods increased, notably industrial supplies and materials.
In contrast, inventory investment declined in the third quarter.
Revisions: The 0.4 percentage point upward revision to the GDP growth rate was more than accounted for by an upward revision to nonfarm inventory investment, notably in the wholesale trade and retail trade industries. Consumer spending on goods and business investment in equipment also were revised up. Partly offsetting these upward revisions, exports were revised down, and imports were revised up.
Corporate profits: Corporate profits increased 2.1% at a quarterly rate in the third quarter after increasing 8.4% in the second quarter.
- Profits of domestic nonfinancial corporations increased 1.8% after increasing 11.9%.
- Profits of domestic financial corporations increased 4.5% after increasing 8.0%.
- Profits from the rest of the world increased 0.3% after decreasing 0.9%.
Over the last 12 months, corporate profits rose 0.4%.