Real gross domestic product increased at an annual rate of 2.0% in the third quarter, reaching a annual rate of $14,730 billion (that is, from the second quarter to the third quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7%. The 3rd quarter real USA GDP was up 3.1% compared to the 3rd quarter of 2009. Just scanning the headlines gives a hint why investors are moving money into emerging markets: China up 9.6%, India 8.8%, Brazil 8.8%.

The third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision (the “second” estimate for the third quarter, based on more complete data, will be released on November 23, 2010).

The increase in real GDP in the third quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), private inventory investment, nonresidential fixed
investment, federal government spending, and exports that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The small acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in imports and accelerations in private inventory investment and in PCE that were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and in exports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 0.8% in the third quarter, compared with an increase of 0.1% in the second. Real personal consumption expenditures increased 2.6% in the third quarter, compared
with an increase of 2.2% in the second. Durable goods increased 6.1%, compared with an
increase of 6.8%.

Related: Initial 4th Quarter 2009 Data Show USA GDP Increased at 5.7% Annual Rate – First Quarter 2009 USA GDP Down 6.1% – India Grew GDP 8.6% in First Quarter – China Economy Grows 11.9% in 1st Quarter

Real nonresidential fixed investment increased 9.7% in the third quarter, compared with an
increase of 17.2% in the second. Nonresidential structures increased 3.9%, in contrast to a
decrease of 0.5%. Equipment and software increased 12.0%, compared with an increase of
24.8%. Real residential fixed investment decreased 29.1%, in compared to an increase of 25.7%.

Real exports of goods and services increased 5.0% in the third quarter, compared with an
increase of 9.1% in the second. Real imports of goods and services increased 17.4%,
compared with an increase of 33.5%.

Real federal government consumption expenditures and gross investment increased 8.8% in the third quarter, compared with an increase of 9.1% in the second. National defense increased 8.5%, compared with an increase of 7.4%. Nondefense increased 9.6%, compared with an increase of 12.8%. Real state and local government consumption expenditures and gross investment decreased 0.2%, in contrast to an increase of 0.6%.

Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 3.9% in the third quarter, compared with an increase of 5.1% in the second.

Current-dollar personal income increased $65.7 billion (2.1%) in the third quarter,
compared with an increase of $123.5 billion (4.1%) in the second. Real disposable personal income increased 0.5%, compared with an increase of 4.4%.

The personal saving rate — saving as a percentage of disposable personal income — was 5.5% in the third quarter, compared with 5.95% in the second. The increase of the personal savings rate recently has been one of the good measures, hopefully this can continue – and the percentage can increase.

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