The Bureau of Economic Analysis has released its preliminary estimate of GDP growth from the first quarter of 2010 through the end of the second quarter and revised estimates of GDP growth from 2007 through the first quarter of 2010:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.4 percent in the second quarter of 2010, (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the
Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The “second” estimate for the second quarter, based on more complete data, will be released on August 27, 2010.
[…]
The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures, private inventory investment, federal government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the second quarter primarily reflected an acceleration in imports and a deceleration in private inventory investment that were partly offset by an upturn in residential fixed investment, an acceleration in nonresidential fixed investment, an upturn in state and local government spending, and an acceleration in federal government spending.
Calculated Risk has a table of the revised estimates of historic GDP growth.
Nearly everything is slowing except government expenditures which the CBO reminded us this week is unsustainable.
In the fullness of time I anticipate the fourth quarter of 2009 and the first quarter of 2010 to be revised downwards. It continues to be puzzling to me how we’ll see a 3%+ growth in GDP through 2010 as the Federal Reserve has recently predicted with both the trend and the revisions in GDP estimates going the wrong way.
Update
I wonder when somebody is going to figure out how much effect real increases in oil prices over the last couple of years have had on the flagging economy.
What to make of this from Floyd Norris?
“1. The private sector is investing at a rapid rate. This is the third consecutive quarter in which real private investment rose at an annual rate of over 25 percent. The second quarter number was 23.9 percent over the figure for the same quarter of 2009. The last time that figure rose as rapidly was in 1984, in the midst of a very strong recovery.
2. A measure of actual spending by Americans — real net final sales to final purchasers — cuts through the effect of imports and exports and of inventory changes. That shows a quarterly rise of 4.1 percent at an annual rate, the best quarter since 2006.”
http://norris.blogs.nytimes.com/2010/07/30/the-lonely-bull/
Steve
What to make of it? Wait and see, I think.
The first item is probably related to how investment is calculated. I believe that what he’s saying is that individuals and companies are saving, paying down debt, and rebuilding their balance sheets.
The second item sounds suspicious to me. Companies have stopped restocking inventories. That doesn’t sound like a boom in retail sales to me.