GDP and the Economy
Advance Estimates for the Third Quarter of 2023
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 of the National Income and Product Accounts (chart 1 and table 1).1 In the second quarter, real GDP increased 2.1 percent.
The increase in third-quarter real GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, and residential fixed investment that were partly offset by a decrease in nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (chart 2 and table 1).2
- The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors to the increase were housing and utilities, health care, financial services and insurance, and food services and accommodations. Within goods, the increase was led by other nondurable goods as well as recreational goods and vehicles.
- Within private inventory investment, the increase was in nonfarm inventories, led by nondurable-goods manufacturing (mainly petroleum and coal product industries) and retail trade industries.
- Within exports, both goods and services increased. The increase in goods was led by durable goods (mainly nonautomotive capital goods and automotive vehicles, engines, and parts). The increase in services was led by travel.
- The increase in state and local government spending primarily reflected increases in state and local government employee compensation and in gross investment in structures.
- The increase in federal government spending reflected increases in both defense and nondefense spending.
- The increase in defense spending was led by spending on services.
- The increase in nondefense spending primarily reflected lower sales of crude oil from the Strategic Petroleum Reserve, based on data from the U.S. Department of Energy. Within the National Economic Accounts, sales are deducted from government consumption expenditures; therefore, a decrease in sales results in a corresponding increase in consumption expenditures. Because the oil sold by the government enters private inventories, there is no direct net effect on GDP.
- The increase in residential fixed investment primarily reflected an increase in new single-family construction. Partly offsetting this increase was a decrease in brokers' commissions and other ownership transfer costs.
- The decrease in nonresidential fixed investment reflected a decrease in equipment that was partly offset by increases in intellectual property products and structures. The decrease in equipment was led by information processing equipment (mainly computers and peripherals as well as communication equipment). The increase in intellectual property products was led by software. The increase in structures was led by manufacturing structures.
- Within imports, both goods and services increased. Within goods, the increase was led by automotive vehicles, engines, and parts as well as nondurable consumer goods. Within services, the leading contributor to the increase was transport (which includes air transportation).
Compared to the second quarter, the acceleration in GDP in the third quarter primarily reflected accelerations in consumer spending and private inventory investment and an upturn in exports. These movements were partly offset by a downturn in nonresidential fixed investment. Imports turned up.
Real final sales to private domestic purchasers, which measures private demand in the domestic economy and is derived as the sum of consumer spending and private fixed investment, increased 3.3 percent in the third quarter after increasing 1.7 percent in the second quarter.
| Line | Series | Share of current-dollar GDP (percent) |
Change from preceding period (percent) |
Contribution to percent change in real GDP (percentage points) |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | ||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||
| 1 | Gross domestic product (GDP)1 | 100.0 | 2.6 | 2.2 | 2.1 | 4.9 | 2.6 | 2.2 | 2.1 | 4.9 |
| 2 | Personal consumption expenditures | 67.8 | 1.2 | 3.8 | 0.8 | 4.0 | 0.79 | 2.54 | 0.55 | 2.69 |
| 3 | Goods | 22.6 | 0.0 | 5.1 | 0.5 | 4.8 | −0.01 | 1.14 | 0.11 | 1.08 |
| 4 | Durable goods | 8.0 | −1.0 | 14.0 | −0.3 | 7.6 | −0.08 | 1.07 | −0.03 | 0.60 |
| 5 | Nondurable goods | 14.6 | 0.5 | 0.5 | 0.9 | 3.3 | 0.07 | 0.07 | 0.14 | 0.48 |
| 6 | Services | 45.3 | 1.8 | 3.1 | 1.0 | 3.6 | 0.80 | 1.40 | 0.44 | 1.62 |
| 7 | Gross private domestic investment | 17.7 | 3.4 | −9.0 | 5.2 | 8.4 | 0.62 | −1.69 | 0.90 | 1.47 |
| 8 | Fixed investment | 17.4 | −5.4 | 3.1 | 5.2 | 0.8 | −0.99 | 0.53 | 0.90 | 0.15 |
| 9 | Nonresidential | 13.5 | 1.7 | 5.7 | 7.4 | −0.1 | 0.24 | 0.76 | 0.98 | 0.00 |
| 10 | Structures | 3.0 | 6.5 | 30.3 | 16.1 | 1.6 | 0.17 | 0.77 | 0.46 | 0.05 |
| 11 | Equipment | 5.0 | −5.0 | −4.1 | 7.7 | −3.8 | −0.26 | −0.21 | 0.38 | −0.19 |
| 12 | Intellectual property products | 5.4 | 6.1 | 3.8 | 2.7 | 2.6 | 0.32 | 0.20 | 0.15 | 0.14 |
| 13 | Residential | 3.9 | −24.9 | −5.3 | −2.2 | 3.9 | −1.23 | −0.22 | −0.09 | 0.15 |
| 14 | Change in private inventories | 0.4 | --- | --- | --- | --- | 1.61 | −2.22 | 0.00 | 1.32 |
| 15 | Net exports of goods and services | −2.8 | --- | --- | --- | --- | 0.26 | 0.58 | 0.04 | −0.08 |
| 16 | Exports | 11.0 | −3.5 | 6.8 | −9.3 | 6.2 | −0.41 | 0.76 | −1.09 | 0.68 |
| 17 | Goods | 7.3 | −6.3 | 12.0 | −16.0 | 7.5 | −0.52 | 0.89 | −1.31 | 0.54 |
| 18 | Services | 3.7 | 3.1 | −3.5 | 6.2 | 3.7 | 0.11 | −0.13 | 0.22 | 0.14 |
| 19 | Imports | 13.8 | −4.3 | 1.3 | −7.6 | 5.7 | 0.66 | −0.18 | 1.13 | −0.75 |
| 20 | Goods | 11.3 | −4.4 | 1.9 | −6.5 | 5.9 | 0.55 | −0.22 | 0.78 | −0.63 |
| 21 | Services | 2.6 | −3.9 | −1.2 | −12.2 | 4.8 | 0.11 | 0.04 | 0.35 | −0.12 |
| 22 | Government consumption expenditures and gross investment | 17.3 | 5.3 | 4.8 | 3.3 | 4.6 | 0.90 | 0.82 | 0.57 | 0.79 |
| 23 | Federal | 6.5 | 9.8 | 5.2 | 1.1 | 6.2 | 0.59 | 0.33 | 0.07 | 0.39 |
| 24 | National defense | 3.6 | 7.7 | 1.9 | 2.3 | 8.0 | 0.27 | 0.07 | 0.08 | 0.28 |
| 25 | Nondefense | 2.8 | 12.6 | 9.5 | −0.4 | 3.9 | 0.32 | 0.26 | −0.01 | 0.11 |
| 26 | State and local | 10.8 | 2.8 | 4.6 | 4.7 | 3.7 | 0.31 | 0.49 | 0.50 | 0.40 |
| Addenda: | ||||||||||
| 27 | Gross domestic income (GDI)2 | --- | −3.0 | 0.5 | 0.7 | --- | --- | --- | --- | --- |
| 28 | Average of GDP and GDI | --- | −0.3 | 1.4 | 1.4 | --- | --- | --- | --- | --- |
| 29 | Final sales of domestic product | --- | 1.0 | 4.6 | 2.1 | 3.5 | --- | --- | --- | --- |
| 30 | Goods | 31.5 | 6.2 | −1.3 | 0.9 | 7.7 | 1.95 | −0.40 | 0.29 | 2.40 |
| 31 | Services | 60.0 | 2.5 | 3.2 | 1.9 | 3.6 | 1.48 | 1.92 | 1.13 | 2.17 |
| 32 | Structures | 8.5 | −9.6 | 8.9 | 7.7 | 3.6 | −0.86 | 0.72 | 0.63 | 0.31 |
- The GDP estimates under the contribution columns are also percent changes.
- GDI is deflated by the implicit price deflator for GDP.
The U.S. Bureau of Economic Analysis' (BEA's) featured measure of inflation in the U.S. economy, the price index for gross domestic purchases (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 (table 2 and chart 3).
Within gross domestic purchases, food prices increased 1.8 percent in the third quarter after increasing 0.1 percent in the second quarter. Prices for energy goods and services increased 15.7 percent after decreasing 15.6 percent. Excluding food and energy, gross domestic purchases prices increased 2.7 percent after increasing 2.1 percent.
The price index for personal consumption expenditures (PCE) increased 2.9 percent in the third quarter after increasing 2.5 percent in the second quarter. The increase in PCE prices reflected increases in prices for both services and goods.
- Within services, price increases were widespread. The leading contributors were housing and utilities (mainly accounted for by housing) and financial services and insurance (led by financial service charges, fees, and commissions) as well as health care (led by hospitals).
- Within goods, the leading contributor to the increase was gasoline and other energy goods (led by motor vehicle fuels, lubricants, and fluids) that was partly offset by a decrease in recreational goods and vehicles (led by video, audio, photographic, and information processing equipment and media).
Excluding food and energy, the “core” PCE price index increased 2.4 percent in the third quarter after increasing 3.7 percent in the second quarter.
| Line | Series | Change from preceding period (percent) |
Contribution to percent change in gross domestic purchases prices (percentage points) |
||||||
|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | ||||||
| Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||
| 1 | Gross domestic purchases1 | 3.8 | 3.6 | 1.4 | 3.0 | 3.8 | 3.6 | 1.4 | 3.0 |
| 2 | Personal consumption expenditures | 4.1 | 4.2 | 2.5 | 2.9 | 2.72 | 2.73 | 1.63 | 1.93 |
| 3 | Goods | 0.1 | 0.7 | 0.2 | 0.8 | 0.04 | 0.16 | 0.05 | 0.19 |
| 4 | Durable goods | −1.6 | −0.9 | 0.1 | −4.4 | −0.13 | −0.07 | 0.01 | −0.35 |
| 5 | Nondurable goods | 1.0 | 1.6 | 0.3 | 3.9 | 0.16 | 0.23 | 0.04 | 0.54 |
| 6 | Services | 6.3 | 6.0 | 3.6 | 4.0 | 2.69 | 2.57 | 1.58 | 1.74 |
| 7 | Gross private domestic investment | 2.8 | 3.2 | −0.1 | 1.9 | 0.49 | 0.56 | −0.02 | 0.33 |
| 8 | Fixed investment | 3.6 | 4.2 | 0.0 | 1.9 | 0.61 | 0.71 | −0.01 | 0.33 |
| 9 | Nonresidential | 3.2 | 6.4 | 0.2 | 1.0 | 0.41 | 0.81 | 0.03 | 0.14 |
| 10 | Structures | 7.0 | 7.2 | 0.9 | −1.8 | 0.18 | 0.20 | 0.03 | −0.05 |
| 11 | Equipment | 5.9 | 7.9 | −1.1 | 2.2 | 0.29 | 0.38 | −0.06 | 0.11 |
| 12 | Intellectual property products | −1.1 | 4.5 | 1.1 | 1.6 | −0.06 | 0.24 | 0.06 | 0.08 |
| 13 | Residential | 4.9 | −2.6 | −0.9 | 5.2 | 0.20 | −0.10 | −0.03 | 0.19 |
| 14 | Change in private inventories | --- | --- | --- | --- | −0.12 | −0.15 | −0.01 | −0.01 |
| 15 | Government consumption expenditures and gross investment | 3.2 | 1.5 | −1.1 | 4.5 | 0.54 | 0.26 | −0.18 | 0.74 |
| 16 | Federal | 4.1 | 4.1 | 2.1 | 4.5 | 0.25 | 0.26 | 0.13 | 0.28 |
| 17 | National defense | 3.6 | 3.3 | 1.9 | 4.2 | 0.13 | 0.12 | 0.07 | 0.15 |
| 18 | Nondefense | 4.7 | 5.2 | 2.3 | 4.9 | 0.13 | 0.14 | 0.06 | 0.13 |
| 19 | State and local | 2.7 | 0.0 | −2.9 | 4.5 | 0.29 | 0.00 | −0.31 | 0.46 |
| Addenda: | |||||||||
| Gross domestic purchases: | |||||||||
| 20 | Food | 7.2 | 3.8 | 0.1 | 1.8 | 0.37 | 0.20 | 0.00 | 0.09 |
| 21 | Energy goods and services | −11.9 | −11.4 | −15.6 | 15.7 | −0.40 | −0.36 | −0.46 | 0.41 |
| 22 | Excluding food and energy | 4.1 | 4.1 | 2.1 | 2.7 | 3.78 | 3.72 | 1.90 | 2.50 |
| Personal consumption expenditures: | |||||||||
| 23 | Food and beverages purchased for off-premises consumption | 7.1 | 3.8 | 0.0 | 1.9 | --- | --- | --- | --- |
| 24 | Energy goods and services | −10.3 | −9.8 | −15.6 | 15.9 | --- | --- | --- | --- |
| 25 | Excluding food and energy | 4.7 | 5.0 | 3.7 | 2.4 | --- | --- | --- | --- |
| 26 | Gross domestic product | 3.9 | 3.9 | 1.7 | 3.5 | --- | --- | --- | --- |
| 27 | Exports of goods and services | −5.6 | 0.1 | −3.9 | 4.0 | --- | --- | --- | --- |
| 28 | Imports of goods and services | −4.3 | −1.3 | −4.8 | 0.1 | --- | --- | --- | --- |
- The estimated prices for gross domestic purchases under the contribution columns are also percent changes.
Note. Most percent changes are from National Income and Product Accounts (NIPA) table 1.6.7; percent changes for personal consumption expenditures (PCE) for food and energy goods and services and for PCE excluding food and energy are from NIPA table 2.3.7. Contributions are from NIPA table 1.6.8. Gross domestic product, export, and import prices are from NIPA table 1.1.7.
Measured in current dollars, personal income increased $199.5 billion in the third quarter, compared with an increase of $239.6 billion in the second quarter (table 3). The increase in the third quarter reflected increases in compensation, proprietors' income, personal income receipts on assets, and rental income of persons that were partly offset by a decrease in personal current transfer receipts.
Personal current taxes increased $103.7 billion in the third quarter after decreasing $57.0 billion in the second quarter.
Current-dollar disposable personal income (DPI) increased $95.8 billion, or 1.9 percent, in the third quarter after increasing $296.5 billion, or 6.1 percent, in the second quarter. Personal outlays increased $359.1 billion after increasing $204.6 billion.
Real DPI (chart 4) decreased 1.0 percent in the third quarter, in contrast to an increase of 3.5 percent in the second quarter. Current-dollar DPI is deflated by the implicit price deflator for consumer spending, which increased 2.9 percent in the third quarter after increasing 2.5 percent in the second quarter.
The personal saving rate (chart 5)—personal saving as a percentage of DPI—was 3.8 percent in the third quarter, compared with 5.2 percent in the second quarter.
| Line | Series | Level | Change from preceding period | ||||
|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | |||||
| Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||
| 1 | Personal income | 22,883.4 | 23,082.9 | 255.3 | 369.8 | 239.6 | 199.5 |
| 2 | Compensation of employees | 14,171.7 | 14,361.1 | 65.8 | 290.2 | 206.5 | 189.4 |
| 3 | Wages and salaries | 11,749.7 | 11,911.4 | 45.6 | 248.4 | 184.3 | 161.7 |
| 4 | Private industries | 10,038.8 | 10,165.8 | 21.6 | 218.8 | 159.2 | 127.0 |
| 5 | Goods-producing industries | 1,843.0 | 1,873.3 | 9.4 | 33.9 | 33.1 | 30.3 |
| 6 | Manufacturing | 1,086.5 | 1,102.4 | −1.3 | 16.7 | 19.4 | 15.9 |
| 7 | Services-producing industries | 8,195.8 | 8,292.5 | 12.2 | 184.9 | 126.0 | 96.8 |
| 8 | Trade, transportation, and utilities | 1,810.4 | 1,832.8 | 1.2 | 52.3 | 20.2 | 22.4 |
| 9 | Other services-producing industries | 6,385.4 | 6,459.7 | 11.0 | 132.7 | 105.8 | 74.4 |
| 10 | Government | 1,710.9 | 1,745.6 | 24.0 | 29.6 | 25.1 | 34.7 |
| 11 | Supplements to wages and salaries | 2,422.0 | 2,449.7 | 20.1 | 41.8 | 22.2 | 27.7 |
| 12 | Proprietors' income with IVA and CCAdj | 1,824.1 | 1,845.8 | 18.0 | 2.1 | −3.3 | 21.8 |
| 13 | Farm | 58.2 | 53.4 | 0.0 | −12.7 | −13.0 | −4.8 |
| 14 | Nonfarm | 1,765.9 | 1,792.5 | 18.0 | 14.8 | 9.7 | 26.6 |
| 15 | Rental income of persons with CCAdj | 961.1 | 974.5 | 14.4 | 38.3 | 15.3 | 13.4 |
| 16 | Personal income receipts on assets | 3,602.6 | 3,624.3 | 72.0 | 51.7 | 25.6 | 21.7 |
| 17 | Personal interest income | 1,754.8 | 1,790.9 | 59.1 | 37.7 | 10.4 | 36.1 |
| 18 | Personal dividend income | 1,847.8 | 1,833.4 | 12.9 | 14.0 | 15.2 | −14.4 |
| 19 | Personal current transfer receipts | 4,120.1 | 4,093.8 | 91.9 | 28.7 | 17.7 | −26.4 |
| 20 | Government social benefits to persons | 4,017.3 | 3,987.9 | 92.0 | 26.6 | 15.8 | −29.4 |
| 21 | Social security | 1,353.8 | 1,361.4 | 11.4 | 114.1 | 13.8 | 7.6 |
| 22 | Medicare | 941.9 | 946.3 | 7.0 | 3.9 | 3.8 | 4.4 |
| 23 | Medicaid | 911.4 | 882.7 | 9.4 | 43.1 | 39.9 | −28.7 |
| 24 | Unemployment insurance | 22.3 | 21.0 | 2.5 | −0.2 | 0.3 | −1.3 |
| 25 | Veterans' benefits | 172.6 | 172.8 | 0.9 | −0.8 | −0.3 | 0.3 |
| 26 | Other | 615.4 | 603.7 | 60.8 | −133.6 | −41.7 | −11.7 |
| 27 | Other current transfer receipts, from business (net) | 102.8 | 105.9 | −0.1 | 2.1 | 2.0 | 3.0 |
| 28 | Less: Contributions for government social insurance | 1,796.2 | 1,816.7 | 6.7 | 41.1 | 22.2 | 20.5 |
| 29 | Less: Personal current taxes | 2,706.7 | 2,810.3 | −41.4 | −332.0 | −57.0 | 103.7 |
| 30 | Equals: Disposable personal income | 20,176.7 | 20,272.6 | 296.7 | 701.8 | 296.5 | 95.8 |
| 31 | Less: Personal outlays | 19,136.6 | 19,495.7 | 286.9 | 376.0 | 204.6 | 359.1 |
| 32 | Personal consumption expenditures | 18,419.0 | 18,734.3 | 232.9 | 352.5 | 149.4 | 315.3 |
| 33 | Personal interest payments1 | 474.7 | 515.2 | 52.8 | 24.5 | 54.9 | 40.4 |
| 34 | Personal current transfer payments | 242.9 | 246.2 | 1.2 | −1.0 | 0.3 | 3.3 |
| 35 | Equals: Personal saving | 1,040.1 | 776.9 | 9.8 | 325.8 | 91.9 | −263.2 |
| 36 | Personal saving as a percentage of DPI | 5.2 | 3.8 | --- | --- | --- | --- |
- CCAdj
- Capital consumption adjustment
- DPI
- Disposable personal income
- IVA
- Inventory valuation adjustment
- Consists of nonmortgage interest paid by households. Note that mortgage interest paid by households is an expense item in the calculation of rental income of persons.
- “Real” estimates are in chained (2017) dollars, and price indexes are chain-type measures. Each GDP estimate for a quarter (advance, second, and third) incorporates increasingly comprehensive and improved source data; for more information, see “The Revisions to GDP, GDI, and Their Major Components” in the January 2018 Survey of Current Business. Quarterly estimates are expressed at seasonally adjusted annual rates, which reflect a rate of activity for a quarter as if it were maintained for a year.
- In this article, “consumer spending” refers to “personal consumption expenditures,” “inventory investment” refers to “change in private inventories,” and “government spending” refers to “government consumption expenditures and gross investment.”
