The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures (PCE), and federal government spending that were partly offset by negative contributions from state and local government spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in PCE and in exports and a downturn in private inventory investment. …
Real exports of goods and services increased 3.1 percent in the second quarter, compared with an increase of 7.9 percent in the first. Real imports of goods and services increased 1.9 percent, compared with an increase of 8.3 percent.
Real federal government consumption expenditures and gross investment increased 2.0 percent in the second quarter, in contrast to a decrease of 9.4 percent in the first. National defense increased 7.1 percent, in contrast to a decrease of 12.6 percent. Nondefense decreased 7.5 percent, compared with a decrease of 2.7 percent. Real state and local government consumption expenditures and gross investment decreased 2.8 percent, compared with a decrease of 3.4 percent.
The change in real private inventories subtracted 0.23 percentage point from the second-quarter change in real GDP, after adding 0.32 percentage point to the first-quarter change. Private businesses increased inventories $40.6 billion in the second quarter, following increases of $49.1 billion in the first quarter and of $38.3 billion in the fourth.
Real final sales of domestic product — GDP less change in private inventories — increased 1.2 percent in the second quarter, after increasing less than 0.1 percent.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.3 percent in the second quarter, 0.1 percentage point more than in the advance estimate; this index increased 4.0 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 2.6 percent in the second quarter, compared with an increase of 2.4 percent in the first.
Real personal consumption expenditures (PCE) increased 0.4% in the second quarter, compared with an increase of 2.1%t in the first.
Rick Davis of Consumer Metrics Institute brings up something in his release today that has always bothered me and that is this:
The effective “deflater” used by the BEA to offset the impact of inflation was 2.51%, still substantially below the rates reported by their sister agencies. Substituting the current inflation rate published by the Bureau of Labor Statistics (actual year-over-year CPI-U of 3.6%) for the rate used by the BEA causes the entire reported GDP growth rate to disappear.Believe what you want to believe, but remember all GDP does is measure spending, not necessarily production. That is because of money “printing” through quantitative easing will artificially inflate spending that is not necessarily related to production (actual wealth). The PMI reports on manufacturing are far better indicators of economic growth.
by: Jeffrey Harding