U.S. Economy Grows Just 1.3% in Q2


United States real gross domestic product increased at an annual rate of 1.3 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. First-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain.

The increase in real GDP in the second quarter primarily reflected positive contributions from exports, nonresidential fixed investment, private inventory investment, and federal government spending that were partly offset by a negative contribution from state and local government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by a sharp deceleration in personal consumption expenditures.

Real personal consumption expenditures increased 0.1 percent in the second quarter, compared with an increase of 2.1 percent in the first.  Durable goods decreased 4.4 percent, in contrast to an increase of 11.7 percent.  Nondurable goods increased 0.1 percent, compared with an increase of 1.6 percent.  Services increased 0.8 percent, the same increase as in the first.

Real nonresidential fixed investment increased 6.3 percent in the second quarter, compared with an increase of 2.1 percent in the first.  Nonresidential structures increased 8.1 percent, in contrast to a decrease of 14.3 percent.  Equipment and software increased 5.7 percent, compared with an increase of 8.7 percent.  Real residential fixed investment increased 3.8 percent, in contrast to a decrease of 2.4 percent.

Real exports of goods and services increased 6.0 percent in the second quarter, compared with an increase of 7.9 percent in the first.  Real imports of goods and services increased 1.3 percent, compared with an increase of 8.3 percent.

Real federal government consumption expenditures and gross investment increased 2.2 percent in the second quarter, in contrast to a decrease of 9.4 percent in the first.  National defense increased 7.3 percent, in contrast to a decrease of 12.6 percent.  Nondefense decreased 7.3 percent, compared with a decrease of 2.7 percent.  Real state and local government consumption expenditures and gross investment decreased 3.4 percent, the same decrease as in the first.

The change in real private inventories added 0.18 percentage point to the second-quarter change in real GDP after adding 0.32 percentage point to the first-quarter change.  Private businesses increased inventories $49.6 billion in the second quarter, following increases of $49.1 billion in the first quarter and $38.3 billion in the fourth.


TradingEconomics.com, US Bureau of Economic Analysis
7/29/2011 1:44:53 PM