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Economy in Brief
U.S. Index of Leading Indicators Fell Again in July
The Conference Board's Composite Leading Economic Indicators Index fell 0.4% m/m...
U.S. Philly Fed General Activity Index Back to Positive Reading in August
The current general activity diffusion index rose nearly 19 points in August to 6.2...
U.S. Unemployment Claims Slightly Lower
Initial claims for unemployment insurance went down 2,000 in the week ended August 13 to 250,000...
Inflation Rages in EMU and Hovers Globally
Inflation in the European Monetary Union in July finalizes at 8.8% year-over-year...
U.S. Retail Sales Hold Steady in July; Nonauto Sales Rise
Total retail sales remained unchanged during July (10.3% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller August 31, 2005
2Q05 US real GDP growth was little revised at 3.3% (AR) as revisions to foreign trade and inventories roughly offset one another. Consensus expectations had been for 3.4% growth.
Operating corporate profits rose a firm 6.1% (17.7%) following a 5.6% gain during 1Q. The increase came despite a 2.2% decline (+9.1% y/y) in financial sector earnings and a modest 1.1% increase (10.6% y/y) increase in foreign earnings. US nonfinancial corporate sector earnings rose 11.9% (24.1% y/y), the strongest quarterly increase in three years.
The positive contribution to GDP growth from a shallower foreign trade deficit was lessened to 1.2 percentage points as import growth was revised to show a slight q/q increase rather than a 2.0% decline. Export growth was raised slightly to 13.2% (8.3% y/y).
The negative growth contribution from inventories was lessened and offset the trade revision, but the 2.0 percentage point drag still was the third in the last four quarters and was the largest since 2000.
Growth in domestic demand was reduced to 3.9%. Business fixed investment growth was notched down a bit to 8.4% (AR, 9.1% y/y) from 9.0% and growth in real PCE similarly was lowered to 3.0% (3.8% y/y) from 3.3%. Residential building growth of 9.8% (5.8% y/y) was unrevised.
The chain price index was unrevised at 2.4% and the chain price index for domestic final demand was lowered slightly to 3.1% (2.8% y/y).
The minutes to the latest meeting of the FOMC can be found here.
Chained 2000$, % AR | 2Q '05 (Prelim.) | 2Q '05 (Advance) | 1Q '05 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|---|
GDP | 3.3% | 3.4% | 3.8% | 3.6% | 4.2% | 2.7% | 1.6% |
Inventory Effect | -2.0% | -2.3% | 0.3% | -1.4% | 0.3% | 0.0% | 0.4% |
Final Sales | 5.4% | 5.8% | 3.5% | 4.2% | 3.9% | 2.7% | 1.2% |
Foreign Trade Effect | 1.2% | 1.6% | -0.4% | 0.1% | -0.5% | -0.3% | -0.6% |
Domestic Final Demand | 3.9% | 4.0% | 3.7% | 4.1% | 4.4% | 3.0% | 1.8% |
Chained GDP Price Index | 2.4% | 2.4% | 3.1% | 2.4% | 2.6% | 2.0% | 1.7% |