GDP Growth Is Stronger Than Expected in the Second Quarter

2023-07-27T10:28:00-05:00

The U.S. economy grew at a solid pace in the second quarter of 2023, fueled by consumer and government spending. The second quarter data from the GDP report suggests that inflation is cooling. The GDP price index rose 2.2% for the second quarter, down from a 4.1% increase in the first quarter. It marks the slowest annual growth rate since the third quarter of 2020. The Personal Consumption Expenditures (PCE) price Index, capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior, rose 2.6% in the second quarter, down from a 4.1% increase in the first quarter. According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 2.4% in the second quarter of 2023, following a 2% gain in the first quarter. This quarter’s growth was above NAHB’s forecast of a 1.4% increase. This quarter’s increase reflected increases in consumer spending, nonresidential fixed investment, government spending, and private inventory investment, partially offset by decreases in exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased. Consumer spending rose at an annual rate of 1.6% in the second quarter, reflecting increases in both services and goods. While expenditures on services increased 2.1% at an annual rate, goods spending increased 0.7% at an annual rate, led by gasoline and other energy goods (+13.1%). Meanwhile, federal government spending increased 0.9% in the second quarter, while state and local government spending rose 3.6%, reflecting increases in compensation of state and local government employees and gross investment in structures. Nonresidential fixed investment increased 7.7% in the second quarter, up from a 0.6% increase in the first quarter. The quarter’s increase in nonresidential fixed investment reflected increases in equipment (+10.8%), structures (+9.7%), and intellectual property products (+3.9%). Additionally, residential fixed investment (RFI) decreased 4.2% in the second quarter. This was the ninth consecutive quarter for which RFI subtracted from the headline growth rate for overall GDP. Within residential fixed investment, single-family structures rose 0.8% at an annual rate, multifamily structures rose 1.5% and other structures (specifically brokers’ commissions) decreased 8.9%. Related ‹ More New Homes Improve Expectations of Housing AvailabilityTags: economics, gdp, inflation, macroeconomics, macroeconomy, residential fixed investment

GDP Growth Is Stronger Than Expected in the Second Quarter2023-07-27T10:28:00-05:00

State-Level GDP in the First Quarter of 2023

2023-07-07T09:21:53-05:00

Real gross domestic product (GDP) increased in all 50 states and the District of Columbia in the first quarter of 2023. According to the U.S. Bureau of Economic Analysis (BEA), the percent change in real GDP increased ranged from 12.4 percent in North Dakota to 0.1 percent in Alabama and Rhode Island. Nationwide, growth in real GDP, measured on a seasonally adjusted annual rate basis, increased 2.0 percent in the first quarter of 2023, after an increase of 2.6 percent in the last quarter of 2022.  Health care and social assistance; retail trade; and agriculture, forestry, fishing, and hunting were the leading contributors to the increase in real GDP across the country. Regionally, real GDP growth increased in all the regions from the last quarter of 2022 to the first quarter of 2023. The percent change in real GDP ranged from 5.0 percent increase in the Plains region (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) to 1.0 percent increase in the Great Lakes (Illinois, Indiana, Michigan, Ohio, and Wisconsin) region. Overall, 14 out of 21 industry groups contributed to the increase in real GDP. Agriculture, forestry, fishing and hunting; arts, entertainment, and recreation; and retail trade were the leading contributors to the increase in real GDP in the first quarter of 2023. On the other hand, finance and insurance industry group decreased in all 50 states and the District of Columbia. At the state level, agriculture, forestry, fishing, and hunting was the leading contributor to growth in North Dakota (12.4 percent), Nebraska (12.3 percent), South Dakota (10.1 percent), Kansas (6.0 percent), and Montana (6.0 percent), the five states with the largest increases in real GDP. Finance and insurance industry was the leading offset to growth in Rhode Island (0.1 percent), one of the states with the smallest increase in real GDP. Related ‹ Construction Job Openings Rise, But Long-Run Trend is DecliningTags: gdp, macroeconomics, state and local markets, state GDP

State-Level GDP in the First Quarter of 20232023-07-07T09:21:53-05:00
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