2Q2017 Gross Domestic Product: Third Estimate

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In its third estimate of 2Q2017 gross domestic product (GDP), the Bureau of Economic Analysis (BEA) edged the growth rate of the U.S. economy to a seasonally adjusted and annualized rate (SAAR) of +3.06% (in line with consensus expectations), up 0.02 percentage point (PP) from the second estimate reported in late August, and 1.82 PP higher than 1Q.

Three of the four groupings of GDP components -- personal consumption expenditures (PCE), private domestic investment (PDI), and net exports (NetX) -- contributed to 1Q growth. Government consumption expenditures (GCE) detracted from it. The changes from the previous 2Q estimate are little more than statistical noise. For example, consumer spending was revised down by 0.03 PP to a SAAR of +2.24%. The inventory contribution continued to be essentially neutral (+0.12%), while the previous growth in commercial fixed investment moderated slightly (to +0.53%). Governmental spending remained in a very minor contraction (-0.03%), and the growth rates for both exports (+0.42%) and imports (-0.22%) underwent modest fine tuning. 

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“The net result continues to show an economy in a state of healthy growth,” wrote Consumer Metric Institute’s Rick Davis.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.