Real gross domestic product (GDP) increased at an annual rate of 3.4% in the third quarter of 2018, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2%.

This most recent GDP estimate ay is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 3.5%. With this third estimate for the third quarter, personal consumption expenditures (PCE) and exports were revised down, and private inventory investment was revised up; the general picture of economic growth remains the same.

Real GDP

Real gross domestic income (GDI) increased 4.3% in the third quarter, compared with an increase of 0.9% in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 3.8% in the third quarter compared with an increase of 2.5% in the second quarter.

The increase in real GDP in the third quarter reflected positive contributions from PCE, private inventory investment, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the third quarter primarily reflected a downturn in exports and decelerations in nonresidential fixed investment and in PCE. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.

Corporate Profits

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $78.2 billion in the third quarter, compared with an increase of $65 billion in the second quarter.

Profits of domestic financial corporations decreased $6.1 billion in the third quarter, in contrast to an increase of $16.5 billion in the second quarter. Profits of domestic nonfinancial corporations increased $83.0 billion, compared with an increase of $53.0 billion. Rest-of-the-world  profits increased $1.3 billion, in contrast to a decrease of $4.5 billion. In the third quarter, receipts decreased $9.5 billion, and payments decreased $10.8 billion.

Next release, January 30, 2019 at 8:30 A.M. EST

Source: Bureau of Economic Analysis, U.S. Dept. of Commerce