Wednesday, July 31, 2013

This Morning's GDP Report

American economic growth was slightly higher than expected in the second quarter, according to figures released by the Bureau of Economic Analysis this morning. GDP grew at 1.7 percent for the quarter, above the consensus estimate of around 1 percent. The figure is also not far from the normal growth rate in post-recession America, where GDP growth has been at 2.2 percent annually.

The most positive signs from the report were probably the indications that consumers are confident enough to make long-term investments again. Spending on residential fixed investment (i.e., housing) increased by 13.4 percent, and spending on durable goods was up 6.5 percent.

The biggest downside to the report was probably the revision of first-quarter GDP down from 1.8 percent to 1.1 percent. This was the final revision to that GDP estimate, so it will go into the books forevermore as 1.1 percent growth.

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