WASHINGTON (10/30/15)--U.S. gross domestic product (GDP) climbed 1.5% at a seasonally adjusted annual rate in the third quarter, nearly a third of the 3.9% jump seen the prior quarter, the Bureau of Economic Analysis reported Thursday (Economy.com Oct. 29).
The 3.9% performance in the second quarter came on the heels of a 0.6% increase in the first, illustrating a volatile stretch for GDP growth this year.
“The U.S. economy grew only sluggishly in the third quarter,” said Scott Hoyt, Moody’s analyst (Economy.com). “The weakness resulted from a sharp drop in inventory accumulation and the lack of support from foreign trade. Fallout from the decline in oil prices is also taking a toll.”
Consumer spending was a bright spot for growth in the third quarter, adding 2.2%. Fixed investment contributed 0.5% to the headline total, and government made modest positive contributions from the state and local levels.
Inventories on the other hand held GDP back by 1.4%, while trade remained flat with exports rising but imports falling.
Real GDP growth rose 2% in the third quarter, slightly behind the 2.7% year-over-year growth seen in the second quarter, and the personal consumption expenditures index climbed 1.2% during the quarter after a 2.2% increase in the second quarter.
When food and energy are removed, inflation increased 1.3% in 3Q, down from a 1.9% step up the previous quarter.
“The weakness will prove temporary,” Hoyt said. “The U.S. consumer is proving resilient, while the rationalization of the energy industry will soon wind down, and the key Chinese economy should stabilize in response to additional fiscal and monetary stimulus measures.”