The broadest measure of health of the nation’s economy shows it expanded at an annual rate of 3.6% in the third quarter of the year, more than originally reported, according to the U.S. Commerce Department on Thursday.
The increase in the gross domestic product, which measures the total output of goods and services, compares to a 2.5% annual rate in the second quarter of the year and an original third quarter estimate of 2.8%. The new figure is the second of three estimates from the department and is higher than many economists were predicting.
Analysts note much of the reason for the better performance is that businesses aggressively accumulated inventories during the period, totaling $116.5 billion, the largest hike since 1998 and up sharply from the original third quarter estimate. They warn economic growth could fall sharply in the fourth quarter if companies stockpile goods at a slower rate as expected.
American Trucking Associations Chief Economist Bob Costello said via Twitter the upward revision to the GDP figure “isn’t very good for trucking.” He noted when rising inventories are removed from the 3.6% annual increase in the third quarter, it amounts to only a 1.9% annual rate. That “isn’t good for freight volumes,” he said, but he expects the GDP to improve next year.
Real personal consumption expenditures increased 1.4% in the third quarter, compared with an increase of 1.8% in the second. Durable goods increased 7.7%, compared with an increase of 6.2%. Nondurable goods increased 2.4%, compared with an increase of 1.6%. The services sector was unchanged in the third quarter while in the second quarter it increased 1.2%.