Housing, consumer spending grow GDP in 2Q
Aug. 30, 2013 – The second estimate of the gross domestic product shows the U.S. economy expanded by 2.5 percent in the second quarter – up from 1.1 percent in the first quarter – primarily due to increases in consumer spending, changes in inventory and increases in residential and nonresidential investment, said NAFCU Director of Research and Chief Economist David Carrier.
“A recovering housing market and robust consumer spending are contributing to growth, while fiscal policy continues to drag on growth,” Carrier said in a NAFCU Macro Data Flash report.
Government spending decreased by 0.9 percent, but residential investment increased 12.9 percent, as did nonresidential investment by 4.4 percent and consumer spending by 1.8 percent during the second quarter.
Changes in inventories grew from $42.2 billion in the first quarter to $62.6 billion in the second. Net exports changed from $-422.3 billion to $-422 billion from the first quarter to the second.
Contributions to growth of real GDP came from gains in personal consumption expenditures, which added 1.2 percentage points to growth, along with:
- private inventories (0.6 percentage points),
- nonresidential investment (0.5 percentage points), and
- residential investment (0.4 percentage points).
The core PCE deflator, excluding food and energy – the Fed’s key inflation metric – decreased from 1.4 percent in the first quarter to 0.8 percent in the second quarter.
“The large drop in Core PCE may be important to the FOMC, which meets in September to consider whether to adjust the Fed’s asset purchase program,” Carrier said.
Real gross domestic income grew 2.5 percent in the second quarter compared to an increase of 2.4 percent in the first quarter. Nominal corporate profits from current production were $2,098.9 billion in the second quarter, up from $2,020.6 billion in the first quarter.
NAFCU Macro Data Flash report