Newsroom
November 25, 2014
GDP up 3.9% in 3Q, second estimate
The U.S. economy grew 3.9 percent in the third quarter, according to the second estimate by the Bureau of Economic Analysis, with a decline in both overall and core personal consumption expenditure inflation that NAFCU's Curt Long says could help keep rates low in the near future.
"[Gross domestic product] growth has now exceeded 3.5 percent in four of the last five quarters," Long, NAFCU's chief economist and director of research, notes in a NAFCU Macro Data Flash report. "Thus far, the economy has proven to be fairly well insulated from weakness abroad. One concern for the Federal Reserve will be core inflation, which dipped slightly in the third quarter to 1.4 percent, and remains well below the Fed's 2 percent target."
The first estimate for economic growth for the third quarter was 3.5 percent. The second estimate showed residential investment up 2.7 percent, nonresidential investment up 7.1 percent, consumer spending up 2.2 percent and government spending up 4.2 percent.
Inflation in core personal consumption expenditures – the Fed's key inflation metric, which excludes food and energy – decreased from 2 percent in the second quarter to 1.4 percent in the third quarter. Overall PCE inflation slowed from 2.3 percent in the second quarter to 1.3 percent in the third quarter.
"Overall and core PCE inflation both declined in the third quarter, giving the Federal Reserve some cover to keep rates low in the near future," Long noted. "The economy is expected to continue to improve as the labor market firms and pent up demand is released."
"[Gross domestic product] growth has now exceeded 3.5 percent in four of the last five quarters," Long, NAFCU's chief economist and director of research, notes in a NAFCU Macro Data Flash report. "Thus far, the economy has proven to be fairly well insulated from weakness abroad. One concern for the Federal Reserve will be core inflation, which dipped slightly in the third quarter to 1.4 percent, and remains well below the Fed's 2 percent target."
The first estimate for economic growth for the third quarter was 3.5 percent. The second estimate showed residential investment up 2.7 percent, nonresidential investment up 7.1 percent, consumer spending up 2.2 percent and government spending up 4.2 percent.
Inflation in core personal consumption expenditures – the Fed's key inflation metric, which excludes food and energy – decreased from 2 percent in the second quarter to 1.4 percent in the third quarter. Overall PCE inflation slowed from 2.3 percent in the second quarter to 1.3 percent in the third quarter.
"Overall and core PCE inflation both declined in the third quarter, giving the Federal Reserve some cover to keep rates low in the near future," Long noted. "The economy is expected to continue to improve as the labor market firms and pent up demand is released."
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