Real GDP in Q3 2021 Grows at an “Advance” Estimated Annual Rate of 2.0%

The Bureau of Economic Analysis (BEA) reported today (10-28-21) that its “advance” estimated Real Gross Domestic Product (GDP) for Q3 of 2021 increased at an annual rate of 2.0%. According to the BEA, the increase in real GDP in the Q3 of 2021 reflected increases in private inventory investment, personal consumption expenditures (PCE), state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment, federal government spending, and exports. Imports, which are a subtraction in the calculation of GDP, increased.

The BEA reports that current dollar personal income increased $47.8 billion in Q3, in contrast to a decrease of -$1.29 trillion in Q2. The increase primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits for unemployment insurance and direct economic impact payments to households established by the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act.

Disposable personal income decreased -$29.4 billion, or -0.7%, in Q3, compared with a decrease of -$1.39 trillion, or -25.7%, in Q2. Real disposable personal income decreased -5.6%, compared with a decrease of -30.2%.

Personal saving was $1.60 trillion in Q3 of 2021, compared with $1.90 trillion in the second quarter. The personal saving rate — personal saving as a percentage of disposable personal income — was 8.9% percent Q3, compared with 10.5% in Q2.

The “second” estimate for Q3, based on more complete data, will be released on November 24, 2021.