United States: Weak second quarter GDP growth revised down
August 26, 2011
In the second quarter, GDP grew 1.0% over the previous quarter at a seasonally-adjusted annualised rate (saar), according to figures released by the Bureau of Economic Analysis on 26 August. The print was revised down from the 1.3% advance estimate released the month before and came in a notch below market expectations that had growth revised to 1.1%. Nevertheless, the print marked a modest improvement compared to the feeble 0.4% saar expansion tallied in the first quarter. On an annual basis, GDP slowed from a 2.2% increase in the previous quarter to a 1.5% expansion in the second quarter. The deterioration over the advance estimates was mostly due to a downward revision to net exports, with the contribution from the external sector to overall down to plus 0.1 percentage points (advance estimate: +0.6 percentage points). The revision came as the result of exports growth being revised down to a 3.1% increase (advance estimate: +6.0% qoq saar), while imports were revised up to a 1.9% expansion (advance estimate: +1.3% qoq saar). In contrast, on the domestic side, personal consumption expenditures and non-residential fixed investment were revised up to a 0.4% expansion (advance estimate: +0.1% quarter-on-quarter saar) and 9.9% (advance estimate: +6.3% qoq saar) respectively. Nonetheless, in its most recent projections from June, the Federal Reserve cut its growth forecast down to between 2.7% and 2.9% for this year (April forecast: +3.1% and +3.3%) and to between 3.3% and 3.7% for 2012 (April forecast: +3.5% and +4.2%).