Keeping you up to date on the latest data releases.
Real GDP was revised up from 1.5 percent to 1.7 percent in the second quarter, matching expectations. On a year-over-year basis real GDP growth stands at 2.3 percent, slightly below its longer-term (20-year) trend of 2.5 percent. The upward revision in the second quarter was primarily due to a downward revision in imports and upward adjustments to the Bureau of Economic Analysis’ estimates of consumption growth, exports growth, and state and local government spending. Private inventories and business fixed investment were nudged down a little, partially offsetting the good news in other categories.
There were some interesting developments in the details. First, the 0.2 percentage point upward revision in consumption to 1.7 percent in the second quarter was due in large part to a sharp upward revision to services consumption—from 1.9 percent to 2.4 percent. And that revision was due to an outsized upward adjustment to housing and utilities consumption, from 3.2 percent to 5.5 percent (its swiftest quarterly increase since mid-2005). Durables consumption was also revised up from a 1.0 percent decline to roughly flat on the quarter, while consumption of nondurables was revised down from a 1.5 percent to 0.5 percent gain in the second quarter. Also, real import growth was halved during the revision, from 6.0 percent to 2.9 percent for the second quarter, and since imports enter into GDP calculation as a subtraction, this changed boosted real GDP growth by 0.5 percentage points. Finally, along with the second estimate of GDP, we got our first glance at real Gross Domestic Income (GDI) for the second quarter. Real GDI rose just 0.6 percent in the second quarter, following relatively strong gains in the first qaurter (up 3.8 percent) and 2011:Q4 (up 4.5 percent). Still, on a year-over-year basis this alternative measure of output growth is up 2.1 percent, matching the four-quarter growth rate in final sales.