WASHINGTON — Third quarter GDP growth was revised up to a 3.3% annual rate from the 3.0% pace in the advance estimate, as expected, data released Wednesday by the Bureau of Economic Analysis showed.
A modest downward revision to PCE growth was more than offset by upward revisions to every other GDP component, particularly fixed investment.
Within consumption, which is now reported up 2.3% for the quarter compared with the 2.4% advance estimate, there were very small downward revisions to both durable and nondurable goods PCE. Services PCE was unrevised.
Nonresidential fixed investment was revised higher to a 4.7% pace from the 3.9% gain in the advance estimate, with upward adjustments to equipment and intellectual property that offset a downward revision to structures investment.
Residential fixed investment was revised up to 5.1% rate of decline from the 6.0% rate of decline in the advance estimate.
Inventory investment was revised up to a $39.0 gain for the quarter from $35.8 billion in the advance estimate. The net export gap now stands at $594.4 billion, slightly smaller than $595.5 billion in the advance estimate.
Government spending turned around, rising 0.4% in the second estimate after being reported down 0.1% in the advance estimate.
As a result of the mix of revisions, real final sales were revised up to a 2.5% gain from the 2.3% increase in the advance estimate.
The first estimate of third quarter Gross Domestic Income was a 2.5% gain, up from 2.3% in the second quarter. This puts the GDP/GDI average at a 2.9% gain for the third quarter, stronger than the 2.7% increase seen in the second quarter.
The key price measures were only modestly revised in the second estimate for the quarter. The chain price index was revised down to a 2.1% gain from the previously reported 2.2% rise, but still up sharply from the 1.0% gain in the second quarter.
The closely watched core PCE price index was revised up to a 1.4% rise from the 1.3% gain in the advance estimate. As a result, the year/year rate for the measure was revised up to 1.4% from the 1.3% year/year gain in the advance estimate. The year/year rate was 1.5% in the second quarter.
Overall, the data suggest that economic growth remained solid, with gains over 3.0% in each of the last two quarters after the usual lull in the first quarter. GDP appears on track to improve in 2017 from the 1.8% rise in 2016, barring a very soft reading in the fourth quarter.
