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In a report from the US Commerce Department on Thursday, the US economy grew faster during the second quarter than was earlier estimated. The report showed that the economy grew at a 4.0 percent annual rate, not the 4.1 percent that was expected, but still faster than the 3.4 percent that was estimated only last month. Contributions to the growth are credited to fewer imports, higher exports, more government spending, lower inflation, and an increase in inventories.
The PCE price index, the Fed’s preferred measure of inflation, was slightly revised lower to a 1.3 percent gain from the estimated 1.4 percent. This is the slowest pace since the 2003 Q2, and quite larger than the previous quarter’s rise of 2.4 percent. In the first quarter, the 0.6 percent annual rate was the slowest quarterly gain in over four years.
The revised growth rate of 1.9 percent pace is slightly higher than the 1.8 percent that was previously estimated. The overall PCE price index has, over the last 12 months, risen 2.3 percent.
Consumer spending, which contributes to as much as 2/3 of the economy, rose 1.4 percent, revised, which is slightly higher than last month’s estimation of 1.3 percent. This is still a major drop from the first three months of the year, at 3.7 percent.
Final sales were estimated at 3.2 percent, and the actual rise was 3.7 percent, nearly 3X faster than the 1.3 percent previously.
Real residential fixed investment fell 11.6 percent during Q2, that’s a larger drop than the firstly reported 9.3 percent, but not as bad as the 16.3 percent drop in the first quarter. Business construction, however, leapt in the second quarter to 11.1 percent. That’s a large rise over the 2.1 percent during the first quarter.
And finally, real exports rose over the 6.4 gain that was first reported, to a 7.6 percent gain in the second quarter. Real imports fell to a 3.2 percent drop over the 2.6 percent drop in the earlier estimate.
22:35
Posted on Dec-14-2007
