According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 1.9% in the third quarter of 2019, down slightly from a 2.0% increase in the second quarter of 2019 but above NAHB’s forecast of 1.5%. This marks the 22nd consecutive quarter of growth, but the fifth quarter that real GDP grew at a rate slower than 2% in the past twenty-two quarters.
The increase in real GDP in the third quarter of 2019 reflected increases in personal consumption expenditures (PCE), which, alone, accounts for about 70 percent of the overall economy, government spending and exports. Meanwhile, growth in imports, which are a subtraction in the calculation of GDP, and decreases in gross private domestic investment had negative contributions to economic growth in the third quarter of 2019. Moreover, while nonresidential fixed investment decreased 3.0%, residential fixed investment (RFI) rose at an annual rate of 5.1% in the third quarter, after six quarters of declines. The change in RFI contributed 0.19 percentage points to headline 1.9% GDP growth rate in the third quarter.
Relative to the second quarter, GDP growth slowed slightly, reflecting slowing in PCE and government spending and a decrease in nonresidential fixed investment. Moreover, net exports subtracted 0.08 percentage point from GDP growth in the third quarter as imports increased 1.2%, surpassing the increase of 0.7% in exports.