Wednesday, July 30, 2014

U.S. Economy Grew 4.0% in the Second Quarter

Real GDP growth jumped in the second quarter at a 4.0% seasonally adjusted annual rate. The jump was anticipated, following negative growth in the first quarter. However, the magnitude was larger than expected. Inventory growth accelerated, driving the growth along with strong consumption. Net exports also improved noticeably from the first to second quarter.

The strong second quarter followed a decline of 2.1% in the first quarter, revised from 2.0%.

Consumption picked up heavily from the first quarter, contributing 1.69% to GDP growth compared to 0.8% in the first quarter. Inventories grew considerably, contributing 1.7% to GDP growth, a drastic change from the negative 1.2% growth the quarter prior.

A reduction in imports reduced this drag on the economy to 0.6%. The government sector contributed 0.3% to growth, as state and local government spending grew but federal government fell.

Read the BEA release.

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