ECON: GDP Stronger Than Expected
- GDP +2.5 vs +2.2 forecast, +1.7 previously
- Deflator and PCE Prices (inflation metrics) unchanged
- Exports +8.6, most since Q2 2010
- Market Reaction: While stronger than expected, this was within the range of estimates, even if on the higher end. Bond markets have weakened, but are already showing signs of support after only moderate losses.
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 2.5 percent in the second quarter of 2013
(that is, from the first quarter to the second quarter), according to the "second" estimate released by the
Bureau of Economic Analysis. In the first quarter, real GDP increased 1.1 percent.
The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 1.7
percent. With this second estimate for the second quarter, the increase in exports was larger than
previously estimated, and the increase in imports was smaller than previously estimated
The increase in real GDP in the second quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed
investment, and residential fixed investment that were partly offset by a negative contribution from
federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the second quarter primarily reflected upturns in exports and in
nonresidential fixed investment and a smaller decrease in federal government spending that were partly
offset by an acceleration in imports and decelerations in private inventory investment and in PCE.