US GDP Growth Revised Sharply Higher in Q2


The US economy expanded an annualized 3 percent in the second quarter of 2017, well above a preliminary reading of 2.6 percent and beating market expectations of 2.7 percent. It is the strongest growth rate since the first three months of 2015, the second estimate from the BEA showed. Increases in consumer spending and in nonresidential fixed investment were larger than previously estimated, offsetting a drag from government expenditure and investment.

Personal consumption expenditure (PCE) contributed 2.28 percentage points to growth (1.93 percent in the advance estimate) and rose 3.3 percent (2.8 percent in the advance estimate). Spending went up more than anticipated for durable goods (8.9 percent from 6.3 percent in the advance estimate), nondurable goods (4.3 percent from 3.8 percent) and services (2.1 percent from 1.9 percent). 

Fixed investment added 0.58 percentage points to growth (0.36 percentage points in the advance estimate) and increased 3.6 percent, compared to a 2.2 percent expansion in the advance estimate. Investment slowed less than initially estimated for structures (6.2 percent compared to 4.9 percent in the advance estimate) and intellectual property products (4.9 percent compared to 1.4 percent) and rose faster for equipment (8.8 percent compared to 8.2 percent). Also, residential investment shrank slightly less (-6.5 percent compared to -6.8 percent in the previous quarter). 

Private inventories added 0.02 percentage points to growth, compared to a 0.02 percent drag in the advance estimate. 

Meanwhile, exports went up at a slower 3.7 percent (4.1 percent in the advance estimate) and imports rose 1.6 percent, below 2.1 percent in the advance estimate. The impact from trade was 0.21 percent, higher than 0.18 percent in the advance estimate. 

Government spending and investment subtracted 0.05 percentage points from growth, compared to a 0.12 percentage point gain in the previous estimate. It fell 0.3 percent compared to an initial estimate of a 0.7 percent gain. 

BEA | Joana Taborda | joana.taborda@tradingeconomics.com
8/30/2017 1:07:41 PM