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Real GDP was revised up in the second quarter from an annualized growth rate of 1.0 percent to 1.3 percent, according to the third estimate from the Bureau of Economic Analysis. On a year-over-year basis, real GDP growth is now up 1.6 percent. Personal consumption expenditures, while still relatively soft in the second quarter, were revised up from a 0.4 percent gain to 0.7 percent, adding 0.2 percentage points to real GDP growth. Most of the upward adjustment to consumption came from services, which were revised up from 1.4 percent to 1.9 percent during the quarter. Net exports were the other contributor to the overall upward revision, as real exports were adjusted up to 3.6 percent from 3.1 percent in the previous estimate. Real imports were knocked down from 1.9 percent to 1.4 percent. Together, these revisions to foreign activity added 0.2 percentage points to real GDP growth in the second quarter. Elsewhere, the investment picture was virtually unchanged during the revision, with residential investment increasing 4.2 percent and business fixed investment rising 10.3 percent in the second quarter.
The only significant downward revision was to the change in private inventories, which edged down by a little over a billion dollars, subtracting slightly less than 0.1 percentage points from output growth. Given the upwardly revisions to consumption and exports, final sales of domestic product was boosted by 0.4 percentage points to 1.6 percent in the second quarter, compared to a flat reading in the first quarter. Over the past year, final sales are up 1.9 percent. Perhaps offsetting the upward revision to real GDP, real Gross Domestic Income (GDI)—an alternative measure of output growth calculated from the income side of the NIPA accounts—was revised down from 1.5 percent to 1.3 percent in the second quarter. Still, on a year-over-year basis, real GDI, at 2.0 percent, is running slightly higher than the growth rate in real GDP.