The BEA issued its second GDP report last week, increasing the 3Q GDP estimate to 2.1%. Real gross domestic purchases – a measure of strictly domestic demand – increased 2.8% Y/Y.From the report:

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, state and local government spending, residential fixed investment, and exports that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

Consumer spending was strong: durable goods were up 4.8% Q/Q while service expenditures increased 4%. Fixed investment declined, but largely as a result of a 7.1% drop in commercial real estate investment.Capital expenditures rose 9.5%.And imports (a net drag on growth) increased 2.1% while exports declined .9%. 

Doug Short notes the tight relationship between PCEs and GDP:

Over the time frame of this chart, the Personal Consumption Expenditures (PCE) component has shown the most consistent correlation with real GDP itself. When PCE has been positive, GDP has usually been positive, and vice versa. In the latest GDP data, the contribution of PCE came at 2.05 of the 2.08 real GDP. This is down from the 2.42 of Q2

He offers the following chart:

There have been a number of one-off GDP events this expansion. For example, bad winter weather negatively impact 1Q14 and 1Q15; Washington gridlock lowered growth on several others.And now the industrial recession caused by weak oil prices, the strong dollar and weaker overseas economies is taking a bit off top-line numbers. Thankfully, domestic demand continues to rise.

The BEA also reported disposable income this week:

Personal income increased $68.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $56.8 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis.Personal consumption expenditures (PCE) increased $15.2 billion, or 0.1 percent. In September, personal income increased $27.4 billion, or 0.2 percent, DPI increased $27.0 billion, or 0.2 percent, and PCE increased $9.5 billion, or 0.1 percent, based on revised estimates.