Corporate Profits, Exports Boost US GDP
The first revision to real gross domestic product for the second quarter was reported Thursday morning.
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The first revision to real gross domestic product (GDP) for the second quarter was reported Thursday morning. The first estimate reported a sharp increase in real GDP of 4.0%, which was up from the first quarter when GDP decreased by 2.1%.
When the first GDP report for the second quarter was released, there was an expected gain of about 3.1%. The revision came in at 4.2%, just above the Bloomberg estimate of 4.0%, while Dow Jones had pegged the estimate at 3.8%.
Even with this slight increase in the GDP estimate, the big economic picture remains basically unchanged. It would appear that most economists are not second-guessing the number going forward and that the future revision will remain in this range.
Corporate spending and profits had a big effect on this revision. Corporate spending increased $154.9 billion in the second quarter compared to a decrease of $201.7 billion in the first.
Real nonresidential fixed investment increased 8.4% in the second quarter, which leaped over the first quarter’s 1.6% posting.
Exports of goods and services increased 10.1%, compared to the decrease of 9.2% in the first quarter.
The GDP price index rose 2.1%, which is just above the estimate of 2.0%. The GDP price index remains relatively unchanged from the previous estimate.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
