United States GDP

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United States: Economy rebounds in Q2 after dismal Q1 result

July 30, 2014

In the second quarter, GDP expanded at a seasonally adjusted annualized rate (SAAR) of 4.0% according to the advance estimate released by the Bureau of Economic Analysis (BEA) on 30 July. The print marked a significant rebound relative to the revised 2.1% contraction recorded in the first quarter (previously reported: -2.9% quarter-on-quarter SAAR) and beat market expectations of a 3.0% increase. The growth turnaround reflects a broad-based improvement both domestically and with respect to the external sector.

On the domestic side, private consumption accelerated from a 1.2% increase in Q1 to a 2.5% expansion in Q2. Non-residential fixed investment picked up from a 1.6% rise in Q1 to a 5.5% expansion in Q2. Residential fixed investment growth rebounded notably to a 7.5% expansion in Q2 (Q1: -5.3% qoq SAAR). Business inventories also contributed to growth. Meanwhile, government spending expanded 1.6% in Q2, which contrasted the 0.8% drop in Q1.

Exports growth rebounded spectacularly to a 9.5% expansion in the second quarter (Q1: -9.3% qoq SAAR) and imports increased 11.7% (Q1: +2.2% qoq SAAR). Consequently, the external sector’s net contribution to overall growth improved from minus 1.7 percentage points in the first quarter to minus 0.6 in the second.

The Federal Reserve expects economic growth to range between 2.8% and 3.0% in 2014 and between 3.0% and 3.2% in 2015. FocusEconomics Consensus Forecast panelists are slightly less optimistic than the Fed and expect GDP to expand 2.6% in 2014, which is down 0.2 percentage points from last month’s forecast. For 2015, the panel expects the economy to expand 3.0%.

Author:, Economist

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United States GDP Chart

USA GDP Q2 2014

Note: Quarter-on-quarter annualized changes and annual variation of seasonally adjusted GDP in %.
Source: Bureau of Economic Analysis and FocusEconomics Consensus Forecast.

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