United States GDP

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United States: Economy grows at a healthy pace in Q3

October 30, 2014

In the third quarter, GDP expanded at a seasonally adjusted annualized rate (SAAR) of 3.5%, according to the advance estimate released by the Bureau of Economic Analysis (BEA) on 30 October. The print came in below the 4.6% expansion recorded in the second quarter but beat market expectations of a 3.0% increase. The growth primarily reflects a jump in government spending and a strong external sector.

On the domestic side, government spending expanded 4.6% in Q3, which was up from the 1.7% increase tallied in Q2 and marked the highest rate in more than five years. In contrast, private consumption decelerated from a 2.5% expansion in Q2 to a 1.8% increase in Q3. Non-residential fixed investment fell from a 9.7% rise in Q2 to a 5.5% increase in Q3. Residential fixed investment growth dropped to a 1.9% rise in Q3 (Q2: +8.8% quarter-on-quarter SAAR). Business inventories were also a drag on growth.

Exports growth increased 7.8% in the third quarter (Q2: +11.0% qoq SAAR) and imports decreased 1.7% (Q2: +11.3% qoq SAAR). Consequently, the external sector’s net contribution to overall growth improved from minus 0.3 percentage points in the second quarter to plus 1.3 percentage points in the third.

The Federal Reserve expects economic growth to range between 2.0% and 2.2% in 2014 and between 2.6% and 3.0% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 2.2% in 2014, which is up 0.1 percentage points from last month’s forecast. For 2015, the panel expects the economy to expand 3.0%, which is unchanged from last month’s projection.


Author:, Economist

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USA GDP Q3 2014

Note: Quarter-on-quarter annualized changes and annual variation of seasonally adjusted GDP in %.
Source: Bureau of Economic Analysis and FocusEconomics Consensus Forecast.


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