Official GDP release:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 1.0 percent in the second quarter of 2009, (that is, from the first quarter to the second), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 6.4 percent.
The decrease in real GDP in the second quarter primarily reflected negative contributions from
nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, private inventory investment, and exports that were partly offset by positive contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased . . .
The much smaller decrease in real GDP in the second quarter than in the first primarily reflected much smaller decreases in nonresidential fixed investment, in exports, and in private inventory
investment, upturns in federal government spending and in state and local government spending, and a smaller decrease in residential fixed investment that were partly offset by a much smaller decrease in imports and a downturn in PCE.”
A few other items:
-Federal Spending up a huge 11%;
-Real personal consumption expenditures decreased 1.2%;
-Smaller decreases were seen in business investment, exports and inventories;
-This is the first time we have had 4 consecutive negative quarters of GDP since record keeping began in 1947;
-Real nonresidential fixed investment decreased 8.9%;
-Last Quarter’s GDP was revised down from negative 5.5% to negative 6.4%;
Peter Boockvar notes that GDP fell more than expected as the deflator rose just .2% (vs expectations of a gain of 1%). Had the deflator been in line, REAL GDP would have fallen 1.8%.
Bottomline: An improving, but weak report.
Gross Domestic Product: Second Quarter 2009 (Advance Estimate)
BEA, JULY 31, 2009