Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, as efforts continued to reopen businesses and resume activities that were postponed or restricted due to COVID-19. In the second quarter of 2020, real GDP decreased 31.4 percent.
The third-quarter increase in real GDP reflected increases in consumer spending, inventory investment, exports, business investment, and housing investment that were partially offset by a decrease in government spending. Imports, a subtraction in the calculation of GDP, increased.
The increase in consumer spending reflected increases in services (led by health care) and goods (led by motor vehicles and parts). The increase in inventory investment reflected an increase in retail trade inventories (led by motor vehicle dealers). The decrease in government spending was in federal as well as state and local government.
Personal income and saving
Real disposable personal income (DPI)—personal income adjusted for taxes and inflation—decreased 16.3 percent in the third quarter after increasing 46.6 percent in the second quarter. The decrease in current-dollar DPI was more than accounted for by a decrease in personal current transfer receipts (notably, government social benefits). Personal saving as a percent of DPI was 15.8 percent in the third quarter, compared with 25.7 percent in the second quarter.
Prices of goods and services purchased by U.S. residents increased 3.4 percent in the third quarter of 2020, after decreasing 1.4 percent in the second quarter.
Food prices decreased 1.8 percent in the third quarter, while energy prices increased 27.8 percent.
Excluding food and energy, prices increased 3.2 percent in the third quarter, after decreasing 0.8 percent in the second quarter.
For more information, read the full release from BEA.