Global| Sep 28 2006US GDP Growth Revised Back to 2.6%, Profits Weaker
by:Tom Moeller
|in:Economy in Brief
Summary
U.S. real GDP growth last quarter was revised back to 2.6% (AR) from the preliminary report of 2.9% and the advance report of 2.5% growth. The figure fell short of Consensus expectations for an unrevised 2.9% advance. Growth in 2Q [...]
U.S. real GDP growth last quarter was revised back to 2.6% (AR) from the preliminary report of 2.9% and the advance report of 2.5% growth. The figure fell short of Consensus expectations for an unrevised 2.9% advance.
Growth in 2Q corporate profits was revised down to 1.4% (18.5% y/y) from the initial report of a 3.2% advance. Profits at U.S. nonfinancial corporations fell a revised 3.6% (+10.7% y/y) instead of rising 0.6%. Financial corporate profits grew a stronger 9.4% (29.6% y/y) and earnings of overseas corporations grew a stronger 6.1% (29.5% y/y).A lessened contribution from inventories, back to 0.4% from 0.6%, was the source of most of the downward revision to 2Q GDP growth. The contribution from an improved net export deficit was unrevised at 0.4 percentage points though exports grew a somewhat stronger 6.2% (8.2% y/y) and imports rose 1.4% (6.4% y/y).
Growth in final sales to domestic purchasers was notched down slightly to 1.6% (3.0% y/y) as the decline in residential investment was deepened to 11.1% (-1.5% y/y) and that reduced 2Q GDP growth by 0.7 percentage points.
Real personal consumption expenditures was unrevised at 2.6% (3.0% y/y) while growth in business fixed investment was revised slightly lower to 4.4% (7.2% y/y).
The rise in the GDP chain price index was unrevised at 3.3%. Less final sales of computers the chain price index grew 3.5% (3.4% y/y). The chain price index for residential investment grew 2.9% (5.0% y/y), down from a peak quarterly rate of growth of 10.5% in early 2004.
Barreling Down the Road To Recession? from the Federal Reserve Bank of St. Louis can be found here.
| Chained 2000$, % AR | 2Q '06 (Final) | 2Q '06 (Prelim.) | 1Q '06 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| GDP | 2.6% | 2.9% | 5.6% | 3.5% | 3.2% | 3.9% | 2.5% |
| Inventory Effect | 0.4% | 0.6% | -0.0% | 0.6% | -0.3% | 0.4% | 0.0% |
| Final Sales | 2.1% | 2.3% | 5.6% | 2.9% | 3.5% | 3.5% | 2.5% |
| Foreign Trade Effect | 0.4% | 0.4% | -0.0% | -0.1% | -0.1% | -0.5% | -0.3% |
| Domestic Final Demand | 1.6% | 1.7% | 5.4% | 3.0% | 3.6% | 4.0% | 2.8% |
| Chained GDP Price Index | 3.3% | 3.3% | 3.3% | 3.3% | 3.0% | 2.8% | 2.1% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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