One quarter after US GDP collapsed by a record 31.4 percent annualized, moments ago the BEA reported that in Q3 the US economy rebounded by a similarly record high 33.1 percent, the biggest annualized increase in history.
The GDP number beat estimates for a 32 percent increase, which was already well above forecasts three months ago for an 18 percent gain. The surge in growth was mostly driven by personal spending, which climbed an annualized 40.7 percent, also a record, while business investment and housing also posted strong increases.
Looking at the data breakdown, the third-quarter increase in real GDP reflected increases in consumer spending, inventory investment, exports, business investment, and housing investment that were partially offset by a decrease in government spending. Imports, a subtraction in the calculation of GDP, increased.
The increase in consumer spending reflected increases in services (led by health care) and goods (led by motor vehicles and parts).
The increase in inventory investment reflected an increase in retail trade inventories (led by motor vehicle dealers). The decrease in government spending was in federal as well as state and local government.
- Personal Consumption Expenditures was the bulk, or 25.27% of the 33.08% GDP increase, up massively from a -24.01% decline in Q2
- Fixed Investment added 4.96% after subtracting -5.27% in Q2
- Private Inventories rebounded strongly, adding 6.62% in Q3 after subtracting -3.50% in Q2
- Net Exports subtracted -3.09% from the final print after adding a modest 0.62% in Q2
- Government consumption also pulled from GDP, reducing the bottom line by -0.68, after adding 0.77% in Q2.