Long Term Perspective

GDP measures total domestic production quarterly.  Final sales reflect demand by consumers, businesses, and government. When final sales grow much faster than GDP for at least two quarters, it signals the need to rebuild inventories. That means production increases and so does GDP. Notice that over the long run, real final sales and real GDP grow by roughly the same magnitude.

Short Term Perspective

The final estimate for third quarter real GDP came in at a robust 4.9 percent annualized, following a 3.8 percent gain the prior quarter. Strength was widespread outside of residential investment. Nonresidential structures investment posted a healthy 9.3 percent increase while equipment & software was up 6.2 percent for the quarter. The exports component was robust with a 19.1 percent jump, more than offsetting a 4.4 percent rise in imports. Personal consumption was healthy with a 2.8 percent annualized boost, with strength in all major components.