2Q2012 Gross Domestic Product: Second (Preliminary) Estimate

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The Bureau of Economic Analysis (BEA) estimated 2Q2012 growth in real U.S. gross domestic product (GDP) at a seasonally adjusted and annualized rate of 1.7 percent, up 0.2 percentage point from the initial (“advance”) estimate. Personal consumption expenditures (PCE), private domestic investment (PDI) and net exports (NetX) contributed to 2Q growth, in that order; government consumption expenditures (GCE) exerted a “drag.”
 

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Consumer Metrics Institute (CMI) made the following observations about the GDP report:

-- The contribution to the annualized growth rate from consumer expenditures for goods weakened further to 0.09 percent (down from 1.11 percent in 1Q, and down even further -- from 1.29 percent -- since 4Q2011).

-- The contribution made by consumer services rose to 1.11 percent (up a significant 0.24 percent from the initial estimate of 0.87 percent).

-- The growth rate contribution from private fixed investments dropped to 0.63 percent (down from 0.76 percent in the previous report).

-- The biggest revision was in reported changes to inventories. The previously reported growth from inventory building was revised sharply downward to a net draw-down of inventories -- enough to contract the headline number by 0.23 percent (although this revised number was still up somewhat from the revised 0.39 percent contraction rate for the prior quarter).

-- The reported drag on GDP growth from contracting expenditures by governments lessened further to -0.18 percent (down from the initial figure of -0.28 percent in the previous estimate). The vast bulk of the contraction has now shifted from federal spending (-0.01 percent) to state and local spending (-0.17 percent).

-- The annualized contribution to the growth rate from exports was revised upward to 0.82 percent.

-- Imports are now reported to be removing only 0.51 percent from the headline growth rate (substantially better than the 1.04 percent drag previously reported). The net of foreign trade is now reported to adding 0.31 percent to the headline number.

-- The annualized growth rate of "real final sales of domestic product" was revised upward to 1.96 percent, still 0.40 percent below the 2.36 percent reported for 1Q.

-- Real per-capita disposable income grew at an annualized 2.38 percent rate during the quarter (to $32,778 per year -- up only $14 per year from the $32,764 reported for the 1Q2011, some 5 quarters ago).