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Economy in Brief

U.S. GDP Growth Is Unrevised
by Tom Moeller  September 26, 2013

The third estimate of U.S. economic growth last quarter of 2.5% (AR, 1.6% y/y) was the same as last month's figure. The rise was near the expected 2.6% gain in the Action Economics Forecast Survey. Nevertheless, the figure represented the fastest rate of economic growth since Q3 2012. After tax corporate profits growth was revised up to 8.5% (5.3% y/y).

The net export effect on GDP growth was revised to slightly negative. Exports grew at an 8.0% rate (2.0% y/y) but imports rose at a 6.9% rate (1.2% y/y). The contribution to growth from inventory accumulation was revised slightly lower to 0.4 percentage points. These downward revisions were offset by an upwardly revised estimate of growth in final sales to domestic purchasers of 2.1% (1.5% y/y), its fastest advance since Q3'12.

Government purchases declined at a 0.4% annual rate (-2.1% y/y), the same as reported initially. Federal government spending fell 1.6% (-4.1% y/y) while state & local spending improved 0.4% (-0.5% y/y). Improved growth in capital spending of 4.7% (2.4% y/y) reflected a 9.4% rise (5.1% y/y) in real spending on information processing equipment. Growth in residential investment was raised to 14.2% (15.2% y/y). Growth in personal consumption remained at 1.8% (1.8% y/y), held back by fewer new vehicle purchases. Spending on home furnishings & equipment, however, grew at a strong 9.1% rate (5.8% y/y) as did apparel purchases at a 6.0% rate (2.7% y/y).

Estimates of price inflation were reduced slightly. The GDP chain price index grew at a 0.6% rate last quarter (1.3% y/y), its weakest rise since Q4'11. The PCE price deflator dipped slightly (+1.1% y/y), held back by the decline in energy prices. The price index for business fixed investment rose at a 1.2% rate (1.1% y/y) but the residential investment price index rose at a strong 5.1% annual rate (4.7% y/y).

The latest GDP figures can be found in Haver's USECON and USNA databases; USNA contains basically all of the Bureau of Economic Analysis' detail on the national accounts, including the new integrated economics accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.

Chained 2009 $, %, AR Q2'13 (3rd Est.) Q2'13 (2nd Est.) Q2'13 (Prelim) Q1'13 Q4'12 Q2 Y/Y 2012 2011 2010
Gross Domestic Product 2.5 2.5 1.7 1.1 0.1 1.6 2.8 1.8 2.5
 Inventory Effect 0.4 0.6 0.4 0.9 -2.0 -0.1 0.2 -0.2 1.5
Final Sales 2.1 1.9 1.3 0.2 2.2 1.7 2.6 2.0 1.0
 Foreign Trade Effect -0.1 0.0 -0.8 -0.3 0.7 0.2 0.2 0.2 -0.5
Domestic Final Sales 2.1 1.9 2.0 0.5 1.4 1.5 2.4 1.8 1.5
Demand Components
Personal Consumption 1.8 1.8 1.8 2.3 1.7 1.8 2.2 2.5 2.0
Business Fixed Investment 4.7 4.4 4.6 -4.6 9.8 2.4 7.3 7.6 2.5
Residential Investment 14.2 12.9 13.4 12.5 19.8 15.2 12.9 0.5 -2.5
Government Spending -0.4 -0.9 -0.4 -4.2 -6.5 -2.0 -1.0 -3.2 0.1
Chain-Type Price Index
GDP      0.6 0.8 0.7 1.3 1.1 1.3 1.7 2.0 1.2
Personal Consumption -0.1 0.0 0.0 1.1 1.6 1.1 1.8 2.4 1.7
 Less Food/Energy 0.8 0.8 0.8 1.4 1.3 1.2 1.8 1.4 1.3
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