2Q2012 Gross Domestic Product: Third (Final) 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 1.3 percent, down 0.2 percentage point from the initial (“advance”) estimate and 0.4 percentage point from the second (“preliminary”) estimate. Personal consumption expenditures (PCE), net exports (NetX) and private domestic investment (PDI) 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 an almost microscopic 0.08 percent (down from 1.11 percent in the prior quarter, and down even further (from 1.29 percent) since the fourth quarter of 2011).

-- The contribution made by consumer services dropped to 0.99 percent.

-- The growth rate contribution from private fixed investments dropped to 0.56 percent (less than half of the 1.18 percent in the first quarter).

-- Once again the biggest revision was in reported changes to inventories. The previously reported shrinkage in inventories was doubled -- with the result lowering the headline number by -0.46 percent (and now making the contraction worse that the -0.39 percent shrinkage rate reported for the prior quarter).

-- The reported drag on GDP growth from contracting expenditures by governments lessened further to -0.14 percent (milder than the -0.18 percent in the previous estimate). Federal spending is nearly neutral in its impact on the headline number (-0.02 percent), while the state and local contribution to the headline is -0.12 percent.

-- The annualized contribution to the growth rate from exports was revised downward to 0.72 percent.

-- Imports are now reported to be removing only -0.49 percent from the headline growth rate. The net of foreign trade is now reported to be adding 0.23 percent to the headline number.

-- The annualized growth rate of "real final sales of domestic product" was revised downward to 1.72 percent, now 0.64 percent below the 2.36 percent reported for the first quarter.

-- Real per-capita disposable income grew at an annualized 2.39 percent rate during the quarter (to $32,779 per year -- but up only $15 per year from the $32,764 reported for the 1st quarter of 2011, some 5 quarters ago).