The Bureau of Economic Analysis (BEA) released its third estimate of growth in the inflation-adjusted (“real”) gross domestic product (GDP) for the 3^rd quarter of 2010 (at http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm ). 

 According to the third estimate, annualized GDP growth in the 3^rd quarter was 2.6%.   This marks a slight upward revision from the second estimate of 2.5%.  Growth in the 2^nd quarter was 1.7%, and was 3.7% in the 1^st quarter of 2010.   The BEA will release its first estimate for 4^th quarter GDP growth on January 28^th.   

Highlights

 The upward revision (0.1 percentage point or $1.1 billion) came primarily from an upward revision to private inventory investment, which was largely offset by a downward revision to personal consumption expenditures. 

 The 2.6% rate of growth primarily reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, and federal government spending.  These positive contributions were partly offset by negative contributions from residential fixed investment and imports.

The acceleration in GDP growth, from a rate of 1.7% in the 2^nd quarter, came primarily from a steep deceleration in imports (a subtraction from GDP) and from an acceleration in private inventory investment.  These were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and exports. The change in real private inventories added 1.61 percentage points to the change in 3^rd quarter GDP, compared to a contribution of 0.82 percentage point in the 2^nd quarter.