34
GDP
INCHES
UPWARD
e newest revised estimate from the
Commerce Department shows economic
growth expanded even more than previously
thought in the second quarter, reflecting a
sharp turnaround from the year's opening
months.
In its third estimate, the Bureau of
Economic Analysis (BEA) reported Friday
that gross domestic product (GDP) increased
at an annualized rate of 4.6 percent in the
second quarter. e figure marks a step up
from the bureau's last estimate of 4.2 percent
growth, which in turn was up from an
advance guess of 4.0 percent.
"With the third estimate for the second
quarter, the general picture of economic
growth remains the same," BEA said. "[I]
ncreases in nonresidential fixed investment
and in exports were larger than previously
estimated."
GDP in the first quarter declined at an
annual rate of 2.1 percent, dragged down
by winter storms and diminished consumer
activity.
According to BEA, the turnaround in
the second quarter largely reflected positive
contributions from consumer spending,
exports, private inventory investment,
state and local government spending, and
both residential and non-residential fixed
investment.
e price index for gross domestic
purchases, a measure of prices paid by U.S.
consumers, rose 2.0 percent in the second
quarter, just slightly above the government's
second estimate and more than half a
percentage point more than in the first
quarter.
Doug Handler, chief U.S. economist
for IHS Global Insight, said the new data
leaves the "central story of the second
quarter" unchanged.
"Economic growth remains on a sound
footing, but the quarter's weather-driven
rebound from an abnormally low first quarter
overstates the extent of this growth," he said
in a note.
Based on the latest numbers, the firm
maintained its prediction of growth in the
3.0–3.5 percent range for the third and fourth
quarters.
