US GDP Growth Confirmed at 4.2% in Q2


The US economy advanced an annualized 4.2 percent on quarter in the second quarter of 2018, unrevised from the previous estimate and in line with market expectations. It is the highest growth rate since the third quarter of 2014. Net trade made the highest contribution since the last three months of 2013 mainly due to a rise in exports of soybeans and other goods before tariffs take completely effect. On the other hand, inventories made the biggest drag on growth since the first quarter of 2014.

Personal consumption expenditure (PCE) contributed 2.57 percentage points to growth (2.55 percentage points in the second estimate) and rose 3.8 percent (the same as in the second estimate). Spending was revised higher for nondurable goods (4 percent compared to 3.7 percent in the second estimate) and lower for services (3 percent compared to 3.1 percent) while consumption of durables rose 8.6 percent, the same as in the previous estimate. 

Fixed investment added 1.1 percentage points to growth (1.07 percentage points in the second estimate) and increased 6.4 percent (6.2 percent in the second estimate). Investment rose more than anticipated for equipment (4.6 percent compared to 4.4 percent) and structures (14.5 percent compared to 13.2 percent) and fell less for residential (-1.3 percent compared to -1.6 percent) but rose slightly less for intellectual property products (10.5 percent compared to 11 percent).

The contribution from private inventories was -1.17 percent, compared to -0.97 percent in the second estimate. 

Exports jumped 9.3 percent (9.1 percent in the second estimate) and imports declined 0.6 percent (-0.4 percent in the second estimate). As a result, the impact from trade was 1.22 percent, better than 1.17 percent in the second estimate and the highest contribution since the last three months of 2013.

Government spending and investment added 0.43 percentage points to growth, slightly higher than 0.41 percentage points in the second estimate. It increased 2.5 percent, above 2.3 percent in the previous release.

US GDP Growth Confirmed at 4.2% in Q2


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
9/27/2018 1:00:23 PM