The BEA’s second estimate of United States third quarter economic growth was released this morning. The revision from the first estimate of 2.0 percent growth was an increase of half a percent to 2.5 percent growth. The revisions were primarily the result of upward revisions to personal consumption expenditures, exports, and state/local government spending. The upward revisions were partially offset by a downward revision to private inventory investment.

The interesting thing to me about this estimate is that it implies that productivity growth was higher than we thought, i.e. higher than what was implied by the first GDP estimate. This is because job growth for the third quarter has been known since early October. One measure of productivity growth is simply the growth rate of the ratio of GDP to jobs.

I blogged that last week’s inflation data release of slower inflation growth raised the probability that the economy could slip into a bad-deflation equilibrium. Today’s GDP data release, with the implied stronger productivity result, reduces the probability that the economy would slip into a bad-deflation equilibrium. For now, this is a nice result, while we wait for more data to come out. The next inflation data release will be in about 3 weeks and the next formal productivity release will be December 1.