US GDP: what annualised growth of 3.4% means
· BehindLines newsroom
The US economy accelerated between July and September, according to the first estimate released on 29 October by the Bureau of Economic Analysis, the statistical agency responsible for the national accounts. Real gross domestic product grew at an annualised rate of 3.4%, following 2.2% in the second quarter.
A pace expressed over a year
The 3.4% figure does not mean that output rose by that amount in three months. The bureau's methodological explanation says it represents the rate that would result over a year if the quarterly change were repeated. The official release also gives the change from one quarter to the next: 0.8%, after seasonal adjustment.
This is also real GDP, which accounts for changes in prices. It should not be confused with growth at current prices. Comparing countries or periods therefore requires checking the time span, the adjustment for prices and the way the figures are presented.
Uneven drivers
Reuters highlights consumption and investment related to artificial intelligence. The agency reports annualised increases of 3.8% in consumer spending and 20.9% in business equipment investment. Computers and peripheral equipment play a significant part in the latter increase.
But the strength of the overall figure does not mean that every component is moving together. Reuters also notes falling residential investment and households drawing more heavily on savings. The agency highlights risks associated with expensive technology projects whose returns remain uncertain.
The statistical bureau says exports fell and imports increased. Imports are subtracted in the accounting calculation of GDP; that convention does not turn every import into a direct loss for a household.
This first estimate may be revised. The bureau announces a second release on 25 November. The available figure therefore describes the past quarter using the data gathered so far, rather than guaranteeing growth at the end of the year.