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In
its third estimate of 2Q2019 gross domestic product (GDP), the Bureau
of Economic Analysis (BEA) nudged the growth rate of the U.S. economy to a
seasonally adjusted and annualized rate (SAAR) of +2.01% (+2.0% expected),
down 0.03 percentage point (PP) from the second estimate (“2Qv2”) and -1.09PP from
1Q2019.
As
in 2Qv1&2, two of the four groupings of GDP components -- personal
consumption expenditures (PCE) and government consumption expenditures (GCE) --
contributed to 2Q growth; private domestic investment (PDI) and net exports
(NetX) detracted from growth.
Just
as the modification to the percentage-change headline was primarily statistical
noise, so too were changes to most of the underlying components. Nearly all of the
positive changes in nominal-dollar terms were limited to (in billions of
dollars): transportation services ($7.4), receipts by nonprofit institutions
($2.6), state and local expenditures ($2.4), recreation services ($2.4), health
care ($1.9) and exports ($1.5). These were largely offset by negative changes
to other services (-$9.3), nonresidential structures (-$3.0), financial
services and insurance (-$1.6), housing and utilities (-$1.5), and other
nondurable goods (-$1.3). In a $21 trillion economy, such changes are barely
more than rounding error.
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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.
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