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Second Quarter U.S. GDP Revised Upward

Real gross domestic product in the United States increased at an annual rate of 1.3%, slightly higher than previous estimate.

A newly released report from the Burean of Economic Analysis showed 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 1.3% in the second quarter of 2011. This was slightly higher than the previous estimate, which put second quarter GDP at 1.0%.
 
The revised GDP estimate is based on more complete source data than were available for the "second" estimate issued last month. The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, personal consumption expenditures (PCE), exports, and federal government spending that were partly offset by negative contributions from state and local government
spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP,
increased.

Some highlights:

  • Final sales of computers added 0.07 percentage point to the second-quarter change in real GDP after adding 0.08 percentage point to the first-quarter change. Motor vehicle output subtracted 0.10 percentage point from the second-quarter change in real GDP after adding 1.08 percentage points to the first-quarter change.
     
  • The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.3 percent in the second quarter, the same increase as in the second estimate. Excluding food and energy prices, the price index for gross domestic purchases increased 2.7 percent in the second quarter, compared with an increase of 2.4 percent in the first.
     
  • Real personal consumption expenditures increased 0.7 percent in the second quarter, compared with an increase of 2.1 percent in the first. Durable goods decreased 5.3 percent, in contrast to an increase of 11.7 percent. Nondurable goods increased 0.2 percent, compared with an increase of 1.6 percent. Services increased 1.9 percent, compared with an increase of 0.8 in the first.

While many analysts see the upwardly revised GDP estimate as a good sign, many concede it is far below the 3-3.5 percent grow rates required to make  broader impact. On the plus side, economists say the positive consumer spending trends reflect more "cautious optimism" as opposed to panic.

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