Recent Updates
- US: Employment Situation (Feb), Intl Trade (Jan)
- US: Establishment Survey Detail (Feb)
- US: Household Survey Detail (Feb)
- Canada: International Trade (Jan), Ivey PMI (Feb)
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Economy in Brief
U.S. Trade Deficit Widens to $68.2 Billion in January
The U.S. trade deficit in goods and services widened to $68.2 billion in January...
U.S. Factory Orders & Shipments Rise Again in January
Manufacturing activity is strengthening. Factory orders rose 2.6% (2.8% y/y) in January...
U.S. Initial Unemployment Insurance Claims Rise Just 9,000
Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
U.S. Productivity's Decline Lessened in Q4'20; Reverses Q3 Increase
Revisions to nonfarm business sector productivity indicated a 4.2% decline during Q4'20...
EMU Unemployment Rate Steadies in January
The overall EMU unemployment rate was steady in January, off peak, but still elevated...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller July 29, 2005
US real GDP in 2Q '05 grew 3.4% (AR) versus the Consensus expectation for 3.5% growth. Revisions to data from 2002 to 2004 lowered growth to an average 2.8% during the period from 3.1% estimated earlier.
Growth in domestic demand continued firm last quarter at a 4.0% annual rate. The acceleration versus 1Q owed to faster growth in business fixed investment at 9.0% (AR, 9.2% y/y) which occurred because of 40.8% (AR) growth in transportation. Real PCE grew 3.3% (3.9% y/y), down slightly from last year's pace, and residential building grew a solid 9.8% (5.9% y/y).
Slower production growth occurred as inventories were drawn down for the first quarter in two years and lowered GDP growth by 2.3 percentage points. It was the third subtraction from GDP growth due to inventories in the last four quarters but it was the largest subtraction since 2000.
A smaller foreign trade deficit contributed 1.6% percentage points to growth last quarter as exports surged 12.6% (8.1% y/y) and easily outpaced imports which declined across categories; by 2.0% (5.2 y/y) in total.
The chain price index grew 2.4%, the slowest rate of growth since 3Q04. The slowdown was the result of foreign trade. The chain price index for domestic final demand grew 3.2% (2.8% y/y), up from 2.9% growth last year.
Happy-Hour Economics, or How an Increase in Demand Can Produce a Decrease in Price from the Federal Reserve Bank of Atlanta can be found here.
Chained 2000$, % AR | 2Q '05 (Advance) | 1Q '05 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
GDP | 3.4% | 3.8% | 3.6% | 4.2% | 2.7% | 1.6% |
Inventory Effect | -2.3% | 0.3% | -1.3% | 0.3% | 0.0% | 0.4% |
Final Sales | 5.8% | 3.5% | 4.3% | 3.9% | 2.7% | 1.2% |
Foreign Trade Effect | 1.6% | -0.4% | 0.2% | -0.5% | -0.3% | -0.6% |
Domestic Final Demand | 4.0% | 3.7% | 4.1% | 4.4% | 3.0% | 1.8% |
Chained GDP Price Index | 2.4% | 3.1% | 2.4% | 2.6% | 2.0% | 1.7% |