Will the 4% GDP for Q2 Hold Up in Thursday’s Revision?

August 27, 2014 by Chris Lange

factoryThe first revision to real gross domestic product (GDP) for the second quarter of 2014 will be reported at 8:30 a.m. on Thursday. The first estimate released on real GDP reported it as being up a sharp 4.0%. When the first GDP report for the second quarter was released, Bloomberg expected a gain of about 3.1%. The question to ask now is whether the 4.0% headline will hold up.

The Bloomberg estimate for this first revision is flat at 4.0%, while Dow Jones showed that estimate as now pegged at a gain of 3.8%.

What perhaps stands out the most here is the snapback and its anticipation of remaining mostly in-line with the first snapshot of second-quarter GDP. Most economists seem to not be second-guessing the number.

The previous report on real GDP in July showed that household spending rose by 2.5% in the second quarter, versus a gain of 1.2% in the first quarter. Also contributing was government spending and investment, with gains of 1.6% in the second quarter.

We would like to point out as well from the previous report, that if you back out the inflationary component and look at the personal consumption expenditure price index, it rose by 2.3%. At that time, Bloomberg was looking for the reading to be 2.0%. Business spending was up by 5.5%. Exports rose by 9.5%, but imports rose even more at 11.7%.

The GDP price index is expected to rise 2% from the previous quarter, remaining flat as well from the first estimate.

A key takeaway going into the GDP report is that very few economists are sticking their necks out here. In some quarters we see economists making larger changes. That just isn’t the case this time.

READ ALSO: America’s Disappearing Jobs

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.