Thursday, August 29, 2013

Second Quarter Growth Receives Strong Upward Revision

Real GDP growth for the second quarter was revised up strongly to 2.5% in the BEA’s second estimate. Growth was revised up from an initial estimate of just 1.7% as reported in the first estimate last month. The upward revision was driven primarily by better than expected exports. Growth in the second quarter accelerated notably from the 1.1% growth in the first quarter.

The acceleration from the first quarter was due primarily to strong growth in fixed investment and a slowing of government drag. Fixed investment swung from a 0.2% drag to a 0.9% boost to the economy in the second quarter, driven by improvements in nonresidential investment. Government drag, which was 0.8% in the first quarter, slowed to just 0.1%. Personal consumption continued to play a strong role in GDP growth, contributing the largest portion of growth at 1.2%.

The upward revision to the first estimate was due almost entirely to an improvement in net exports, which were neutral in the second estimate, but provided a 0.8% drag in the initial estimate.

Read the BEA release.

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