Real Gross Domestic Product (GDP) growth in both the first and second quarter was greater than previously reported, the U.S. Commerce Department announced Wednesday.
Real GDP grew 2.2% in the second quarter, more than the 1.5% gain previously reported, according to the U.S. Bureau of Economic Analysis (BEA) report of the third estimate for the period released Wednesday. The second quarter GDP growth also exceeds the 1.5% increase economists had predicted.
The contributors to the increase in real GDP in the second quarter were consumer spending, investment, and exports. Imports, which are a subtraction in the calculation of GDP, increased.
Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 4.6% in the second quarter, revised up 0.4 percentage point from the previous estimate of 4.2%, which had been revised up from a prior estimate of 3.9%.
The BEA report breaks down the changes to industry components that prompted the revision:
“From an industry perspective, the increase in real GDP reflected increases in real value added of 2.5 percent for private services-producing industries, 2.3 percent for private goods-producing industries, and less than 0.1 percent for government. The leading industry contributors to the increase in real GDP were real estate and rental and leasing, information, durable goods manufacturing, and finance and insurance. The leading offsets were decreases in transportation and warehousing, retail trade, and nondurable goods manufacturing.”
Inflation was lower in the second quarter than previously reported, according to revisions to three indices reported by the BEA:
- The personal consumption expenditures (PCE) price index increase was revised down, from 5.3% to 5.0%.
- The “core” PCE price index (excluding food and energy) increase was revised down from 3.6% to 3.3%.
- The GDP price index rise was revised down from 5.8 to 5.6%.
Real GDP growth in the first quarter was revised higher, from 2.1% to 2.5%, in the new estimate released Wednesday. The change primarily reflects upward revisions to exports of services and consumer spending on both goods and services.
The “real” percent changes reported by the BEA reflect seasonally-adjusted annual rates (SAAR).
