Report: Economy grew 5 percent in third quarter

The economy grew at a heated 5.0 percent rate in the third quarter of 2014, according to a report from the Bureau of Economic Analysis released on Tuesday.

Real personal consumption expenditures increased 3.2 percent in the third quarter, compared with an increase of 2.5 percent in the second.  Durable goods increased 9.2 percent, compared with an increase of 14.1 percent.  Nondurable goods increased 2.5 percent, compared with an increase of 2.2 percent.  Services increased 2.5 percent, compared with an increase of 0.9 percent.

Real nonresidential fixed investment increased 8.9 percent in the third quarter, compared with an increase of 9.7 percent in the second.  Investment in nonresidential structures increased 4.8 percent, compared with an increase of 12.6 percent.  Investment in equipment increased 11.0 percent, compared with an increase of 11.2 percent.  Investment in intellectual property products increased 8.8 percent, compared with an increase of 5.5 percent.  Real residential fixed investment increased 3.2 percent, compared with an increase of 8.8 percent.

Real exports of goods and services increased 4.5 percent in the third quarter, compared with an increase of 11.1 percent in the second.  Real imports of goods and services decreased 0.9 percent, in contrast to an increase of 11.3 percent.

Real federal government consumption expenditures and gross investment increased 9.9 percent in the third quarter, in contrast to a decrease of 0.9 percent in the second.  National defense increased 16.0 percent, compared with an increase of 0.9 percent.  Nondefense increased 0.4 percent, in contrast to a decrease of 3.8 percent.  Real state and local government consumption expenditures and gross investment increased 1.1 percent, compared with an increase of 3.4 percent.

The change in real private inventories subtracted 0.03 percentage point from the third-quarter change in real GDP after adding 1.42 percentage points to the second-quarter change.  Private businesses increased inventories $82.2 billion in the third quarter, following increases of $84.8 billion in the second quarter and $35.2 billion in the first.

Real final sales of domestic product — GDP less change in private inventories — increased 5.0 percent in the third quarter, compared with an increase of 3.2 percent in the second.

Real gross national product — the goods and services produced by the labor and property supplied by U.S. residents — increased 5.3 percent in the third quarter, compared with an increase of 4.6 percent in the second.  GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $13.3 billion in the third quarter, compared with an increase of $1.4 billion in the second; in the third quarter, receipts increased $13.2 billion, and payments increased less than $0.1 billion.