Recent Updates

  • Singapore: New Registered & Deregistered Motor Vehicles (Nov)
  • Japan: Corporate Goods Price Index (Nov), Machinery Orders, Machine Equipment Production (Oct)
  • Australia: ADI Property Exposures statistics, ADI Property Exposures Statistics (Q3), WMI Consumer Sentiment, Unemployment Expectations (Dec)
  • Korea: Labor Market (Nov), Credit to Households (Oct)
  • China: Mobile Phone Shipment (Nov), Innovation Index (2017)
  • more updates...

Economy in Brief

US GDP Growth Revised Up, Profit Growth Slowed
by Carol Stone August 30, 2007

U.S. real GDP growth during 2Q 2007 was revised higher to 4.0% (AR) from the advance report of 3.4% growth. The figure about matched consensus expectations for a 4.0 to 4.1% rise.

Reported for the first time, 2Q profits (so-called operating profits, with IVA and CCAdj) advanced 6.4%; weakness in the prior three quarters means the year/year growth was just 4.5%. Profits at U.S. nonfinancial corporations grew just 3.2% and they are below Q2 2006 by 1.4%. Financial companies saw good gains, 12.1% in the quarter, producing 5.4% from a year ago. Earnings from foreign operations posted a 5.4% increase, yielding 21.1% year/year.

Growth in final sales to domestic purchasers was revised to 2.2% from 1.7% initially reported.

Growth in business fixed investment was revised higher to an 11.1% (4.1% y/y) rate, from 8.1% reported last month. Spending both on structures and on equipment & software was enlarged, structures to 27.2% from 22.1% and equipment to 4.3% from just 2.3% in last month's tally.

Growth in real personal consumption expenditures was changed little at 1.4% versus 1.3%. Durables spending was cut to 0.4% growth from 1.6% last month, but nondurable goods showed only a 0.1% decline compared with 0.8% down reported before. Services were also reduced, to 0.6% growth from 2.2% showing earlier.

The decline in residential investment was deepened to 11.6% from 9.3%. The year/year change is now -16.4%, virtually the same size loss as in Q1.

Real consumption and investment spending by governments grew 4.1%, down marginally from 4.2% in the previous report.

Inventories added 0.2 percentage points to GDP growth, the same as shown before, while the contribution of net exports was raised to 1.4 percentage points from 1.2 percentage points indicated before and a nice turnaround from Q1's 0.5 percentage point drag. Exports grew 7.6% and imports decreased 3.2%.

The rise in the GDP chain price index was unrevised at 2.7%, in line with the average over the last year. The domestic final sales price deflator grew 3.8% (2.5% y/y). Consumer prices less food & energy rose just 1.3% (2.0% y/y), initially reported at 1.4%.

Chained 2000$, % AR 2Q '07 (Prelim.) 2Q '07 (Advance) 1Q '07 Y/Y 2006 2005 2004
GDP 4.0 3.4 0.6 1.9 2.9 3.1 3.6
  Inventory Effect 0.2 0.2 -0.7 -0.4 0.1 -0.2 0.4
Final Sales 3.7 3.2 1.3 2.4 2.8 3.3 3.3
Foreign Trade Effect 1.4  1.2 -0.5 0.5 -0.1 -0.2 -0.7
Domestic Final Demand 2.2 1.9 1.7 1.8 2.7 3.3 3.8
Chained GDP Price Index 2.7 2.7 4.2 2.8 2.6 1.7 2.1
close
large image