Real US gross domestic product -- the output of goods and services produced by labour and property located in the United States -- increased at an annual rate of 3.9 percent in the third quarter of 2007, according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent and 0.6 percent in the first quarter.
The price index for personal consumption expenditures rose by 1.7 percent after increasing 4.3 percent in the second quarter. The closely watch core price PCE price benchmark excluding food and energy accelerated, rising 1.8 percent, but within the Federal Reserve's target zone, after increasing 1.4 percent in the second quarter.
Foreign trade contributed 0.93 percentage point to GDP in the third quarter. US exports surged 16.2 percent and imports increased 5.2 percent. In the second quarter, trade added 1.32 percentage points to GDP; exports in that period were 7.5 percent higher and imports fell by 2.7 percent.
US market participants are still hoping that the Fed will announce a cut in the Federal funds rate from its current level of 4.75% when it announces its decision on rates at 2:15 pm EST today Wednesday.
GDP
Sources of real GDP growth in the third quarter:
In contrast:
Prices
Led by a decline in energy prices, prices of goods and services purchased by U.S. residents decelerated in the third quarter, rising 1.6 percent after rising 3.8 percent in the second quarter.
Personal Income
Real disposable personal income—income adjusted for inflation and taxes—increased 4.4 percent in the third quarter, compared with a 0.6 percent increase in the second quarter. The higher growth rate reflected the decline in inflation.
