Due to the Christmas break, we did not discuss last week’s third estimate of 3rd quarter GDP when it was released on December 23. The media noted the big headline jump in the real (inflation-adjusted) increase in GDP, from a 3.9 percent in the second estimate to 5.0 percent in the third estimate.
November’s second estimate of 3rd quarter GDP included moderate health spending growth. The third estimate blows that out of the water. Much of the upward revision to the GDP estimate was due to health spending.
The real dollar change in seasonally adjusted GDP (at annual rates) from the 2nd quarter to the 3rd quarter was estimated at $153.7 billion in the second estimate. The third estimate revised this up to $195.2 billion, a change of $41.5 billion (27 percent).