Rocky Mountain region grew the fastest at 1.6% but growth in the Southeast and the Far West was the slowest at 1.1%
The US Gross Domestic Product (GDP), in current dollar terms, has increased to $18.56tn in Q3 of 2016, an increase of 2.9% on last year and 1.2% on the last quarter.
As a measure, GDP in Q3 2016 will become an important benchmark in the years to come as it was the last quarter reported before Donald Trump’s election as US president in November. Future assessments of his economic achievements will be measured against the Q3 2016 GDP results. Q3 2016 is therefore a quarter worth studying.
Q3 2016 Gross Domestic Product By US Region $billion
Gross Domestic Product in $bn for Q3 2016 by US Region, compared to Q2 '16 and Q3 '15 with quarterly and yearly percentage growth indicators.| Region | 2016 Q3 | Proportion Of Annual Growth In Q3 | 2016 Q2 | 2015 Q3 | QonQ % | YonY % |
|---|---|---|---|---|---|---|
| Southeast | 3967 | 33.7% | 3924 | 3840 | 1.1% | 3.3% |
| Far West | 3578 | 27.5% | 3539 | 3436 | 1.1% | 4.1% |
| Mideast | 3385 | 45.4% | 3343 | 3293 | 1.3% | 2.8% |
| Great Lakes | 2585 | 38.8% | 2555 | 2509 | 1.2% | 3.0% |
| Southwest | 2231 | 120.3% | 2198 | 2203 | 1.5% | 1.3% |
| Plains | 1181 | 140.9% | 1167 | 1171 | 1.2% | 0.9% |
| New England | 993 | 35.3% | 981 | 958 | 1.3% | 3.7% |
| Rocky Mountain | 634 | 53.5% | 624 | 615 | 1.6% | 3.1% |
| USA | 18555 | 42.2% | 18331 | 18025 | 1.2% | 2.9% |
The economy was growing in every region of the USA between Q3 2015 and Q3 2016 and also in the last quarter itself. The second column in the table above seeks to illustrate the momentum behind each regional economy in Q3 2016. For the U.S.A, 42.2% of the annual growth came in Q3 of 2016. As there are 4 quarters, a 25% growth rate would imply steady growth, so a 42.2% increase would imply the economy was gaining momentum as growth accelerated in Q3 2016.
Steady as she goes in New England, Southeast and Far West
The proportion of annual GDP growth achieved in the Far West in Q3 2016 at 27.5%, at 33.7% in the Southeast and 35.3% in New England suggests these regions were growing at a steady consistent rate.
Faster growth in the Great Plains, Midwest & Rocky Mountains
The proportion of annual GDP growth achieved in the Great Plains in Q3 2016 at 38.8%, at 45.4% in the Mideast and 53.5% in the Rocky Mountains suggests economic growth was accelerating in Q3 2016 at a faster rate than in the previous 3 quarters.
Plains & Southwest Economies grow in Q3 after shrinking
In the Southwest and the Plains regions, the proportion of annual GDP growth achieved in Q3 2016 exceeded 100%. This means that GDP must have declined in the previous three quarters in these two regions and that is the case. GDP in both economies declined by .2% and .3% respectively. Therefore the growth in GDP in the Plains and the Southwest has only come about in Q3 2016.
Whilst economic growth is welcome in the Southwest/Plains regions, the Q3 quarterly growth of 1.5% in the Southwest is faster than every other region except the Rocky Mountain region. Growth in the Plains was more modest in Q3 of 1.2% and at .9% annually, it is the slowest growing region.
Q3 2016 GDP By Category
The USA Gross Domestic Product split between government, private sector manufacturing and services industries, for the quarters Q3 and Q2 in 2016 and Q3 in 2015.| Period | Total | Government | Private: Manufacturing | Private: Services |
|---|---|---|---|---|
| Q3 2016 | 18555 | 2282 | 3370 | 12903 |
| Q2 2016 | 18331 | 2262 | 3344 | 12725 |
| Q3 2015 | 18025 | 2229 | 3399 | 12397 |
| % Change YonY | 2.9% | 2.4% | -.01% | 4.1% |
| % Growth coming in last quarter | 42.2% | 37.7% | 90% | 35.2% |
The table above shows the contrasting performance of the 3 main categories of economic activity. The US economy is dominated by the private sector service industry which, AT $12.9tn, Â accounts for 70% of all economic activity. Private sector manufacturing amounts to $3.4tn, accounting for 18% and government of $2.3tn making up the remaining 12%.
The transformation of the US into a service economy continues
The private service industry is grew by 4.1% in the year compared to a decline of 0.1% in the private manufacturing industry and a 2.4% increase in government. The growth in the last quarter of 35.2% in private service industries and 37.7% in government suggest a steady increase in momentum for both.
In contrast, the private manufacturing industry has suffered a lot in this short period. It fell by $55bn by Q2 2016, equivalent to 1.6% but reversed 90% of that decline in Q3 2016 to just about stand still.
The decline of the US manufacturing economy: Real or imagined?
The decline of the manufacturing sector was one of the main election issues raised by Donald Trump, drawing attention to the loss of jobs to Mexico, China and elsewhere. Between 1997 and Q3 2016 the GDP value of the private manufacturing sector has increased in value to $3.4tn from $1.9tn. However, as a proportion of national GDP it has fallen from 22.6% in 1997 to 18% today.
This raises two questions:
- What is the GDP performance by industry since 1997?
- What States are most reliant on manufacturing?
For more information, click on the question to take you to related articles.
The Largest 17 State Economies Q3 2016
The 17 Midsize State Economies Q3 2016
The 17 Smallest State Economies Q3 2016
Definition of Terms
Gross domestic product (GDP) by state is the measure of the market value of all final goods and services produced within a state in a pa
rticular period of time. In concept, an industry’s GDP by state, referred to as its “value added”, is equivalent to its gross output (sales or receipts and other operating income, commodity taxes, and inventory change) minus its intermediate inputs (consumption of goods and services purchased from other U.S. industries or imported). GDP by state is the state counterpart of the Nation’s GDP, the Bureau of Economic Analysis’ featured and most comprehensive measure of U.S. economic activity. GDP by state differs from national GDP for the following reasons:
- GDP by state excludes and national GDP includes the compensation of federal civilian and military personnel stationed abroad and government consumption of fixed capital for military structures located abroad and for military equipment, except office equipment;
- GDP by state and GDP have different revision schedules.
