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Wednesday, November 29, 2023 Contact: Connie O’Connell, (301) 278-9003 Gross Domestic Product (Second Estimate) Corporate Profits (Preliminary Estimate) Third Quarter 2023 Real gross domestic product (GDP) increased at an annual rate of 5.2 percent in the third quarter of 2023, according to the “second” estimate. In the second quarter, real GDP increased 2.1 percent. The increase in the third quarter primarily reflected increases in consumer spending and inventory investment. Imports, which are a subtraction in the calculation of GDP, increased. Contributions to Percent Change in Real GDP, Third Quarter 2023 Real GDP increased 5.2 percent Percentage point contributions 6.00 5.00 4.00 3.00 2.00 1.00 0.00 -1.00 Real GDP, percent change Consumer spending Inventory investment Exports State and local Federal government government spending spending Housing investment Business investment Imports * Note. Imports are a subtraction in the calculation of GDP; thus, an increase in imports results in a negative contribution to GDP. U.S. Bureau of Economic Analysis Seasonally adjusted annual rates • The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors were housing and utilities, food services and accommodations, and health care. Within goods, the leading contributors to the increase were recreational goods and vehicles as well as other nondurable goods (led by prescription drugs). • The increase in inventory investment primarily reflected increases in wholesale trade, manufacturing, and retail trade. Compared to the second quarter, the acceleration in GDP in the third quarter primarily reflected accelerations in consumer spending and inventory investment and an upturn in exports. These movements were partly offset by a deceleration in business investment. Imports turned up. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and regional economic data—are available at www.bea.gov. Email alerts are also available. The “third” estimate of GDP, along with an updated estimate of Corporate Profits and an estimate of GDP by Industry, for the third quarter of 2023 will be released on December 21, 2023. Prices Gross domestic purchases prices, the prices of 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. Excluding food and energy, prices increased 2.7 percent after increasing 2.1 percent. Percent Change Quarter-to-Quarter Change in Prices 9.0 Gross Domestic Purchases Price Index 8.0 Gross Domestic Purchases, Excluding Food and Energy 7.0 PCE Price Index 6.0 PCE, Excluding Food and Energy 5.0 4.0 3.0 2.0 1.0 0.0 2022:Q2 2022:Q3 2022:Q4 2023:Q1 2023:Q2 U.S. Bureau of Economic Analysis 2023:Q3 Seasonally adjusted annual rates Personal consumption expenditures (PCE) prices increased 2.8 percent in the third quarter after increasing 2.5 percent in the second quarter. Excluding food and energy, the PCE “core” price index increased 2.3 percent after increasing 3.7 percent. Personal income and saving Real disposable personal income (DPI)— personal income adjusted for taxes and inflation—increased 0.1 percent in the third quarter after increasing 3.3 percent (revised) in the second quarter. Current-dollar DPI increased 2.9 percent in the third quarter, following an increase of 5.8 percent (revised) in the second quarter. The increase in the third quarter reflected increases in compensation, proprietors’ income, and personal income receipts on assets that were partly offset by an increase in personal current taxes. Percent Quarter-to-Quarter Change in Disposable Personal Income Real DPI (chained) Current-Dollar DPI Change 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.1 0.0 -2.0 2022:Q4 2023:Q1 U.S. Bureau of Economic Analysis 2023:Q2 2023:Q3 Seasonally adjusted annual rates Personal saving as a percentage of DPI was 4.0 percent in the third quarter, compared with 5.1 percent (revised) in the second quarter. Page 2 of 3 Corporate profits from current production Profits increased 3.3 percent at a quarterly rate in the third quarter after increasing 0.2 percent in the second quarter. Percent Change • Profits of domestic financial corporations increased 4.2 percent after decreasing 10.9 percent. • Profits of domestic nonfinancial corporations increased 3.4 percent after increasing 1.8 percent. • Profits from the rest of the world (net) increased 2.1 percent after increasing 4.5 percent. Quarter-to-Quarter Change in Corporate Profits 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 2022:Q2 2022:Q3 2022:Q4 2023:Q1 U.S. Bureau of Economic Analysis 2023:Q2 2023:Q3 Seasonally adjusted quarterly rates Corporate profits decreased 0.7 percent in the third quarter from one year ago. Updates to GDP The update from the “advance” estimate reflected upward revisions to business investment, state and local government spending, housing investment, inventory investment, and federal government spending that were partly offset by downward revisions to consumer spending and exports. Imports were revised down. For additional details on the estimates, refer to the Technical Note. 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