Third-Quarter GDP

Real gross domestic product (GDP) increased at a 3.9 percent annualized rate in the third quarter of 2007, following a growth rate of 3.8 percent in the second quarter. Growth in personal consumption expenditures (PCE) accelerated in the third quarter, from 1.4 percent in the second quarter to 3.0 percent in the third. Also contributing to the rise in real GDP was an increase in exports, from 7.5 percent to 16.2 percent, driven by a 23.0 percent spike in goods exports. Imports rose from –2.7 percent to 5.2 percent. Gross private fixed investment was somewhat weaker in the third quarter, rising only 0.8 percent, as residential investment fell 20.1 percent and the growth rate in business fixed investment dropped from 11.0 percent in the second quarter to 7.9 percent in the third. However, investment in equipment and software rose 5.9 percent during the quarter, to its highest growth rate in six quarters. Of course, this information is from the advance report, which is based on incomplete data and, in some cases, trend assumptions, and is subject to further revisions.