United States: Economic growth picks up in the second quarter
July 31, 2013
In the second quarter, GDP expanded at a seasonally adjusted annualised rate (SAAR) of 1.7%, according to the advance estimate released by the Bureau of Economic Analysis (BEA) on 31 July. The print marked an improvement relative to the revised 1.1% growth recorded in the first quarter (previously reported: +1.8%) and was above FocusEconomics panellists' expectations of a 1.3% rise. The second quarter expansion reflected robust growth in fixed investment, whereas the external sector deteriorated somewhat.
The growth in Q2 was driven primarily by a rebound in non-residential fixed investment, which surged from a 4.6% contraction in the first quarter to a 4.6% expansion in the second quarter. Moreover, residential fixed investment continued to strengthen, rising from 12.5% in Q1 to 13.4% in Q2, suggesting continued recovery in the housing sector. Government spending cuts as part of the budget sequester remained, although the contractions diminished from 4.2% to just 0.4% from the first to the second quarter. Private consumption rose 1.8%; this figure was down from the 2.3% increase registered in the previous period.
Exports rebounded 5.4% in the second quarter (Q1: -1.3% SAAR), and imports increased 9.5% (Q4: +0.6% SAAR). However, the external sector's net contribution to overall growth deteriorated from minus 0.3 percentage points in the first quarter to minus 0.8 percentage points in the second.
The Federal Reserve expects economic growth to range between 2.3% and 2.6% in 2013 and to accelerate to between 3.0% and 3.5% in 2014. FocusEconomics Consensus Forecast panellists are less optimistic than the Fed and expect GDP to expand 1.9% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects the economy to expand 2.7%.
Author: Carl Kelly, Economist