The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.0% annual rate in the third quarter. That is close to the long-term historical average of 3.1%, and better than the 2.1% we’ve seen on average since the Great Recession ended in 2009.
Solid growth over the last two quarters has brought our Econbrowser Recession Indicator Index down to 3.3%. The U.S. remains clearly in the expansion phase of the business cycle.
About a fourth of the growth in GDP came from inventory accumulation, with real final sales only up 2.3% at an annual rate. Inventory estimates are subject to significant revision and gains there should not be expected to be repeated. Nonresidential fixed investment continues to help, with 3/4 of the 2017:Q3 growth in nonresidential fixed investment coming from purchases of new equipment. Housing still isn’t making a positive contribution.