WASHINGTON — Real gross domestic product rose at an annual rate of 2.0% in the third quarter, aided by consumer spending, the Commerce Department reported Friday.
Core personal consumption expenditures, which excludes food and energy purchases, the Federal Reserve’s preferred measure of inflation, increased 0.8% on an annual basis.
That level falls short of economists’ estimates for the quarter and may support the Fed’s anticipated asset purchase plan.
Consumer spending, which accounts for about 70% of real GDP, rose 2.6% at an annual rate, after a 2.2% gain in the second quarter.
It was the largest gain in consumer spending since the fourth quarter of 2006 and added 1.79 percentage points to the GDP growth rate.
The 0.8% rise in core personal consumption expenditures was the smallest gain since the fourth quarter of 2008. The Fed is widely expected to announce a renewed asset purchase program next week to ward off deflation concerns.
Economists expected a 2.0% gain in GDP and a 1.0% increase in core consumer expenditures.
The GDP estimate is the first of three for the quarter, with revisions in November and December after additional information is tabulated.
Real GDP expanded at a 1.7% rate in the second quarter and a 3.7% pace in the first quarter of 2010.
“Consumer spending was 2.6% in the third quarter, the strongest rate of growth yet since the recession ended in June 2009,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, said in a research note.
“The data were a little better than expected today,” Rupkey said. “It looks like things are improving further in the fourth quarter.”