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Economy Expanded at Rate of 2.9% in Third Quarter of 2016

Economy grew at rate of 1.4 percent in second quarter

cash money
AP

The U.S. economy expanded in the third quarter of 2016 as real gross domestic product grew at a rate of 2.9 percent, according to the advance estimate released by the Bureau of Economic Analysis.

Real GDP represents the value of the production of goods and services in the economy and is adjusted for inflation. The third quarter growth in 2016 of 2.9 percent, which includes performance from July, August and September, was an increase from the 1.4 percent growth seen in the second quarter of 2016.

"The Bureau emphasized that the third-quarter advance estimate released today is based on source date that are incomplete or subject to further revision by the source agency," the report said. "The ‘second' estimate for the third quarter, based on more complete data, will be released on November 29, 2016."

According to the Wall Street Journal, data suggests that the economy will not grow more than 2015's 2.6 percent growth rate.

"The economy has failed to grow better than a 3% in any year since 2005, and many economists expect such growth will remain a rarity," the article states. "The nonpartisan Congressional Budget Office projects GDP to grow at around 2% annually through 2026. Federal Reserve policy makers have pegged longer-run output gains at a 1.8% annual rate."

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