United States: Economic growth accelerates in Q2
July 30, 2015
In the second quarter, GDP expanded at a seasonally adjusted annualized rate (SAAR) of 2.3%, according to an advance estimate released by the Bureau of Economic Analysis (BEA) on 30 July. The print marked an acceleration over the 0.6% growth recorded in the first quarter, which was revised up from a previously reported 0.2% contraction. Q1’s result slightly undershot market expectations of a 2.6% increase. The acceleration reflects that strengthening private consumption and a recovery in exports offset weakening fixed investment.
On the domestic side, private consumption expanded 2.9% in Q2, which was well above the 1.7% tallied in Q1. Moreover, government spending increased 0.8% after having contracted 0.1% in the previous quarter. In contrast, non-residential fixed investment slumped from a 1.6% increase in Q1 to a 0.6% decline in Q2, which marked the weakest result in more than five years. Residential fixed investment slowed from a 10.1% expansion in Q1 to an increase of 6.6% in Q2.
Exports increased 5.3% in the second quarter (Q1: -6.0% quarter-on-quater SAAR) while imports increased 3.5% (Q1: +7.1% qoq SAAR). Consequently, the external sector’s net contribution to overall growth improved from minus 1.9 percentage points in the first quarter to 0.1 in the second quarter.
Author: Carl Kelly, Economist