August 28, 2014

2Q14 GDP, 1st Revision (082814): An Annualized 4.2%, Up From 4.0%

Filed under: Economy,Taxes & Government — Tom @ 7:05 am

Predictions: They’re barely exist. As of 6:30, I couldn’t find one that was specific. Early Monday, in a rundown on the upcoming week’s reports, I found a Bloomberg prediction of 3.9 percent, down only slight from the initial 4.0 percent. An article this morning at Bloomberg containing mentions of upcoming reports doesn’t even mention GDP. This AP dispatch, which will be revised when the data comes out, carries no prediction. UPDATE: Business Insider has 3.9%.

Things have been awfully quiet since that 4.0 percent initial report in late July. That could either be because nothing has happened which would cause one to expect a revision, or that there are expected downward revisions that haven’t been disclosed. It probably doesn’t indicate any realistic chance of a significant write-up.

We’ll see here at 8:30.

HERE IT IS: It went up, but not significantly —

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

… The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Here is how things changed from the original estimate:

2Q14GDP1stREvVsAdv.png

There was more fixed investment, the inventory increase shrunk, and net imports were less of a drag.

This beats expectations, and isn’t bad. But we need about 10 more quarters like to this to make up the $2 trillion GDP vs. historical trend gap the Obama bare-recovery has created.

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