Friday, September 26, 2014

Second Quarter GPD Revised Up to 4.6%

Real GDP growth for the second quarter was revised up to 4.6% in the BEA’s final estimate. The upward revision was driven by improvements across the board. Growth in the second quarter jumped following the decline in the first quarter. Second quarter GDP more than compensated for the decline in the first quarter.

Consumption remained the strongest component of growth, contributing 1.8% to second quarter growth, a slight uptick from the previous estimate. Fixed investment jumped from its first quarter reading of 0.0% to 1.5%. Inventories contributed 1.4% in the second quarter, following a 1.2% decline in the first quarter. Inventories tend to be highly volatile. The government went from dragging growth by 0.2% in the first quarter to contributing 0.3% growth in the second.

The healthy growth of the economy in the second quarter is due to several factors. First, the harsh winter is over and the second quarter rebounded as a result. Moreover, the government’s austerity measures are no longer weighing on GDP growth. Finally, customers are spearheading growth with higher consumption levels.

Read the BEA release.

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