Friday, July 31, 2009

Real GDP declines 1.0 Percent in Q2

by Bill McBride on 7/31/2009 08:30:00 AM

From the BEA: Gross Domestic Product: Second Quarter 2009 (Advance)

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.
...
Real personal consumption expenditures decreased 1.2 percent in the second quarter, in contrast to an increase of 0.6 percent in the first. ...

Real nonresidential fixed investment decreased 8.9 percent in the second quarter, compared with a decrease of 39.2 percent in the first. Nonresidential structures decreased 8.9 percent, compared with a decrease of 43.6 percent. Equipment and software decreased 9.0 percent, compared with a decrease of 36.4 percent. Real residential fixed investment decreased 29.3 percent, compared with a decrease of 38.2 percent.
So PCE decreased (as expected), and the investment slump continued.

Exports and government spending were the positives.

For the stress tests, the baseline scenario for Q2 was minus 1.2%, and the more adverse scenario was minus 4.3%, so, before revisions, Q2 is tracking close to the baseline scenario.

This is the fourth consecutive quarterly decline in GDP; the first time that has happened since the government started keeping quarterly records in 1947.

More to come ...

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