Real GDP: Third-Quarter 2009 Third Estimate

Third-quarter GDP growth was revised down again in the third estimate. The annualized growth rate has dropped in successive estimates from 3.5 percent to 2.8 percent to 2.2 percent, the latest. This most recent revision was greater than expected (the consensus expectation was for 2.7 percent growth). The four-quarter percent change also fell 0.1 percentage point to −2.6 percent. The downward revision was largely driven by an additional 1.8 percentage point (pp) decrease in business fixed investment and smaller reductions in personal consumption and private inventories. Other declines occurred in government spending and residential investment. Government spending dropped some of the gain ascribed to it in the second estimate, falling from a 3.1 percent increase to a 2.7 percent increase in the third estimate. Residential investment continued its downward path of revision since the advanced estimate, dropping another 0.6 pp to end at 18.9 percent growth. These losses were offset only by a positive revision to exports, which added 0.8 pp to its annualized growth from last quarter.