2Q16 GDP, Third Estimate (092916): An Annualized 1.4 Percent, Revised Up From 1.1 Percent; ‘Health Care’ Is 56 Pct. of Past 4 Quarters’ ‘Growth
- Yahoo’s Economic Calendar — annualized +1.3 percent.
- Can’t find much else out there. Here’s a link estimating 1.2 percent.
The report will be here at 8:30.
HERE IT IS (full release with tables): Oh boy, a slight beat —
Real gross domestic product increased at an annual rate of 1.4 percent in the second quarter of 2016, according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 percent.
… With the third estimate for the second quarter, the general picture of economic growth remains the same. The most notable change from the second to third estimate is that nonresidential fixed investment increased in the second quarter; in the previous estimate, nonresidential fixed investment decreased.
Real gross domestic income (GDI) decreased 0.2 percent in the second quarter, in contrast to an increase of 0.8 percent in the first. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.6 percent in the second quarter, compared with an increase of 0.8 percent in the first.
The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment. These were partly offset by negative contributions from private inventory investment, residential fixed investment, and 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 an acceleration in PCE and upturns in nonresidential fixed investment and in exports. These were partly offset by a larger decrease in private inventory investment, downturns in state and local government spending and in residential fixed investment, and an upturn in imports.
Current-dollar GDP increased 3.7 percent, or $168.5 billion, in the second quarter to a level of $18,450.1 billion. In the first quarter, current dollar GDP increased 1.3 percent, or $58.8 billion.
The price index for gross domestic purchases increased 2.1 percent in the second quarter, compared with an increase of 0.2 percent in the first. The PCE price index increased 2.0 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.8 percent, compared with an increase of 2.1 percent.
Updates to GDP
The upward revision to the percent change in real GDP primarily reflected upward revisions to nonresidential fixed investment, private inventory investment, and exports.
I’ll have the updated detail shortly.
UPDATE: Here it is:
The critical thing to note, as I’ve highlighted, is that health care costs, which have grown in REAL terms by over 5 percent in the past four quarters, have accounted for 56 percent (0.71 divided by 1.28) of the economy’s “growth.”
Very little of this disproportionate increase represents any kind of genuine improvement in living standards — and it completely explains why so many everyday people who don’t dig into the numbers and are out there living their lives feel that the overall economy and their personal financial situation are each essentially going nowhere.