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Economy in Brief
U.S. Leading Indicators Rebounded in March
The Conference Board's Composite Index of Leading Economic Indicators rebounded in March, rising 1.3% m/m (+7.9% y/y)...
Chicago Fed National Activity Index Increases in March
The Chicago Fed's National Activity Index increased to 1.71 during March...
Kansas City Fed Manufacturing Activity Strengthens in April
The Kansas City Fed reported that its manufacturing sector business activity index rose to a record 31 in April...
U.S. Initial Jobless Claims Fall Again to a New Pandemic-Period Low
Initial claims for unemployment insurance decreased again in the week ending April 17, reaching 547,000...
U.K. CBI Optimism Speaks Volumes
The U.K. CBI survey saw its order component backtrack in April...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller August 29, 2018
Real gross domestic product grew 4.2% (AR) during Q2'18 (2.9% y/y), revised higher from 4.1% reported initially. It remained the strongest increase since Q3'14. A 4.0% gain had been expected in the Action Economics Forecast Survey. The GDP price index increased an unrevised and expected 3.0% (2.4% y/y). It was the strongest gain since Q3'08.
After tax corporate profits increased 3.7% (6.7% y/y) following an 8.5% rise. The 12.4% six-month increase was the strongest since Q1 2012. Pretax profits increased 3.3% (7.7% y/y), the strongest rise in four years. Earnings in the nonfinancial sector grew an improved 5.1% (6.6% y/y). Financial sector profits increased 3.8% (19.2% y/y) but foreign sector earnings fell 1.7% (+4.1% y/y).
Personal consumption expenditures strengthened 3.8% (2.6% y/y), revised from 4.0%. They were led by an 8.6% surge (6.6% y/y) in spending on durable goods. Motor vehicle expenditures gained a lessened 6.7% (4.2% y/y) but purchases of recreational goods & vehicles surged an upwardly revised 9.3% (7.7% y/y). Spending on furniture & appliance spending improved 6.1% (7.1% y/y). Nondurable goods buying advanced 3.7% (2.5% y/y). Clothing purchases strengthened 8.9% (3.0% y/y) and food & beverage spending rose 2.8% (3.5% y/y). Gasoline & fuel oil purchases increased 2.3% (-1.4% y/y). Outlays on services gained 3.1% (2.0% y/y) led by an 8.4% rise (2.7% y/y) in restaurant & accommodations outlays. Medical care outlays increased 2.2% (2.8% y/y) and recreation spending gained 3.3% (0.3% y/y). Spending on housing & utilities improved 2.5% (1.4% y/y).
Nonresidential investment increased a strengthened 8.5% (7.0% y/y) led by a 13.2% jump (5.3% y/y) in structures outlays. Equipment investment rose 4.4% (8.1% y/y), paced by a 10.8% jump (10.5% y/y) in information processing equipment. Intellectual property products investment improved an upwardly revised 11.0% (6.7% y/y), following a 14.1% surge during Q1. Outlays on industrial equipment fell 3.5% (+3.8% y/y).
Residential investment declined 1.6% (+1.3% y/y), down for the fourth quarter in the last five.
Government sector outlays increased 2.4% (1.3% y/y) led by a 3.7% rise (2.3% y/y) in federal government purchases. National defense spending strengthened 6.0% (2.2% y/y), the largest quarterly rise in nine years. State & local government spending increased 1.6% (0.7% y/y).
Improvement in the foreign trade deficit added an improved 1.2 percentage points to GDP growth last quarter. Exports surged 9.1% (5.7% y/y) while imports edged 0.4% lower (+4.4% y/y). The change in inventories subtracted 1.0 percentage point from growth.
The chained GDP price index increased an unchanged 3.0% (2.4% y/y). The residential investment price index surged 7.3% (6.0% y/y). The PCE price index increased 1.9% (2.2% y/y) and the business fixed investment price index rose 1.9% (1.2% y/y). The export price index strengthened 5.2% after a 0.2% improvement.
The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in AS1REPNA.
Information in the Yield Curve about Future Recessions from the Federal Reserve Bank of San Francisco can be found here.
Chained 2012 $ (%, AR) | Q2'18 (Second Estimate) | Q2'18 (Advance Estimate) | Q1'18 | Q4'17 | Q2'18 Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|---|
Gross Domestic Product | 4.2 | 4.1 | 2.2 | 2.3 | 2.9 | 2.2 | 1.6 | 2.9 |
Inventory Effect | -1.0 | -1.0 | 0.3 | -0.9 | -0.2 | -0.1 | -0.5 | 0.3 |
Final Sales | 5.3 | 5.1 | 1.9 | 3.2 | 3.0 | 2.2 | 2.1 | 2.6 |
Foreign Trade Effect | 1.2 | 1.1 | 0.0 | -0.9 | 0.1 | -0.3 | -0.2 | -0.7 |
Domestic Final Sales | 3.9 | 3.9 | 1.9 | 4.0 | 2.9 | 2.5 | 2.3 | 3.3 |
Demand Components | ||||||||
Personal Consumption Expenditure | 3.8 | 4.0 | 0.5 | 3.9 | 2.6 | 2.5 | 2.7 | 3.7 |
Nonresidential Business Fixed Investment | 8.5 | 7.4 | 11.5 | 4.9 | 7.0 | 5.3 | 0.5 | 1.8 |
Residential Investment | -1.6 | -1.1 | -3.4 | 11.2 | 1.3 | 3.3 | 6.5 | 10.1 |
Government Spending | 2.4 | 2.1 | 1.5 | 2.4 | 1.3 | -0.1 | 1.4 | 1.9 |
Chain-Type Price Index | ||||||||
GDP | 3.0 | 3.0 | 2.0 | 2.5 | 2.4 | 1.9 | 1.1 | 1.0 |
Personal Consumption Expenditures | 1.9 | 1.8 | 2.5 | 2.7 | 2.2 | 1.8 | 1.1 | 0.3 |
Nonresidential Investment | 1.9 | 2.0 | 0.7 | 0.7 | 1.2 | 0.7 | -0.8 | 0.5 |
Residential Investment | 7.3 | 7.5 | 8.8 | 3.1 | 6.0 | 4.5 | 3.6 | 2.7 |