The Commerce Department said early Friday that the rate of real gross domestic product (GDP) growth increased to 2 percent in the third quarter of 2012, compared to 1.3 percent in the second quarter.
Commerce’s Bureau of Economic Analysis (BEA) said that an uptick in consumer spending was the main driver of the increase, with the federal government also increasing its spending – primarily on defense – and residential home investment also positively contributing to growth.
Economists had expected real GDP growth in the third quarter to be around 1.7 percent.
Inflation also slowed down slightly in the third quarter, with BEA reporting that the price index – excluding food and energy prices — for gross domestic purchases increased 1.3 percent in the third quarter, compared with an increase of 1.4 percent in the second.
The rate of growth in the third quarter was up from the second quarter’s reading of 1.3 percent and identical to the first quarter. Over the first nine months of 2012, real GDP growth has averaged 1.8 percent, compared to average growth of 2 percent in 2011.
Current-dollar GDP — the market value of the nation’s output of goods and services — increased 5.0 percent, or $190.1 billion, in the third quarter to a level of $15,775.7 billion. In the second quarter, current-dollar GDP increased 2.8 percent, or $107.3 billion.