GDP Report: Latest Estimate Shows Economy Grew by 2.8% in Third Quarter of 2024

Updated Oct. 30 with the latest GDP estimate from the Bureau of Economic Analysis.

The U.S. GDP grew slightly less the rate it did in the second quarter of 2024, according to the first estimate of real gross domestic product from the Bureau of Economic Analysis, released Oct. 30.

The GDP is the market value — in current dollars — of all goods and services produced within the United States in a given period; Real GDP adjusts that measure for inflation. Changes in GDP are expressed on an annualized basis.

The third quarter — July, August and September — saw an annual growth rate of real GDP by 2.8%, the first estimate, known as the advance estimate, shows.

The third quarter growth rate was lower than the second quarter, but higher than the first quarter in 2024:

• 3% annual rate of growth in Q2 2024.

• 1.6% annual rate of growth in Q1 2024.

• 3.4% annual rate of growth in Q4 2023.

• 4.9% annual rate of growth in Q3 2023.

• 2.1% annual rate of growth in Q2 2023.

• 2.1% annual rate of growth in Q1 2023

The second estimate for third quarter GDP will be released on Nov. 27.

Why did GDP increase in Q3 2024?

The increase in real GDP was largely due to increases in consumer spending, exports and federal government spending.

Imports, which subtract from GDP, also increased in the third quarter.

What did consumers spend money on in Q3 2024?

Within consumer spending, increases were recorded in both goods and services.

Among the services that saw spending increases were:

• Health care, led by outpatient services.

• Food services and accommodations.

And among spending on goods, these categories saw the largest increases:

• Nondurable goods, led by prescription drugs

• Motor vehicles and parts

How did personal income change in Q3 2024?

Personal income increased in Q2 2024 while personal savings slowed, according to the report.

• Current-dollar personal income (all sources of income including wages and salaries, government benefits, dividends and interest, business ownership and more) increased $221.3 billion in Q3 2024, according to the advance estimate. In Q2 2024, current-dollar personal income increased $315.7 billion.

• Disposable personal income (equal to personal income minus taxes) increased 3.1% in the third quarter compared to a 5% increase in the second quarter of 2024. Real disposable personal income also increased 1.6% in the third quarter compared to a 2.4% increase in the second quarter.

• The rate of personal savings (personal savings as a percentage of disposable personal income) slowed in Q3: 4.8% compared with 5.2% in the second quarter.

How did GDP in 2023 compare to recent years?

In 2020, at the beginning of the COVID-19 pandemic, the annual rate of GDP dropped to levels far below even those during the Great Recession, federal data shows. By the end of 2020 and into 2021, GDP rebounded quickly. However, the first two quarters of 2022 showed signs of slowing down before a more robust finish at the end of the year.

GDP continued its upward trajectory throughout 2023: Real GDP increased 2.5% in 2023, a 0.6 percentage point increase from real GDP in 2022 (1.9%). That rise was largely due to consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending. GDP growth was partly offset by decreases in residential fixed investment and inventory investment. Imports, which are not included in the total GDP calculation, decreased.

Here’s what else factored into overall GDP in 2023:

• The current-dollar GDP increase slowed, rising 6.3% (about $1.61 trillion) in 2023, compared with a 9.1% increase in 2022. 

• The price index for gross domestic purchases increased 3.4% in 2023. Compare that with a 6.8% increase in 2022. 

• The Personal Consumption Expenditures price index increased 3.7% in 2023, compared with 6.5% in 2022. The core PCE — minus food and energy — increased 4.1% compared with an increase of 5.2%. The Federal Reserve watches the core PCE closely when determining rate hikes.