Q2/18 GDP Increases at 4.1% Annual Rate, Up From 2.2% in Q1/18



Real gross domestic product increased at an annual rate of 4.1% in Q2/18, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2%.

The bureau emphasized that the second-quarter advance estimate is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2018.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports, a smaller decrease in residential fixed investment, and accelerations in federal government spending and in state and local spending. These movements were partly offset by a downturn in private inventory investment and a deceleration in nonresidential fixed investment. Imports decelerated.

Current-dollar GDP increased 7.4%, or $361.5 billion, in the second quarter to a level of $20.4 trillion. In the first quarter, current-dollar GDP increased 4.3%, or $209.2 billion.

The price index for gross domestic purchases increased 2.3% in the second quarter, compared with an increase of 2.5% in the first quarter. The PCE price index increased 1.8%, compared with a increase of 2.5%. Excluding food and energy prices, the PCE price index increased 2.0%, compared with a increase of 2.2%.

Personal Income

Current-dollar personal income increased $183.7 billion in the second quarter, compared with an increase of $215.8 billion in the first quarter. Decelerations in wages and salaries, government social benefits, personal interest income and nonfarm proprietors’ income were partly offset by accelerations in personal dividend income and rental income, a deceleration in contributions for government social insurance (a subtraction in the calculation of personal income), and upturn in farm proprietors’ income.

Disposable personal income increased $167.5 billion, or 4.5%, in the second quarter, compared with an increase of $256.7 billion, or 7.0% in the first quarter. Real disposable personal income increased 2.6%, compared with a increase of 4.4%.

Personal saving was $1,051.1 billion in the second quarter, compared with $1094.1 billion in the first quarter. The personal saving rate – personal saving as a percentage of disposable personal income – was 6.8% in the second quarter, compared with 7.2% in the first quarter.


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