GDP Percent Change

Components of GDP % Change

July 28, 2017 – Gross Domestic Product (GDP) is the broadest measure of economic activity within a country and measures the market value of all final goods and services produced within a country over a certain period.  There are four components GDP is created from:  investment (including residential and nonresidential expenditures), consumption (including durable goods, non-durable goods, and services spending), government spending, and net exports.

The first estimate of real GDP increased at an annualized rate of 2.6% in the second quarter, in line with the consensus and 1.4% above quarter 1. Personal consumption came in at 2.8%, above the boosted first quarter estimate of 1.9%. Business investment was estimated to be up 5.2% from the previous quarter. This offset the decrease in residential investment which was down 6.8%. Net exports dropped to -2.7% from 3.2% in the previous estimate. Government expenditures rose to 1.0% from 0.8%.

GDP rose for the second quarter, much as expected. Durable and non-durable consumer spending was the highlight of this report, growing 6.3% and 3.8%, respectively. This is good because consumer spending is a large portion of GDP and non-durables performed even with low gasoline prices. Expectations were lowered for this quarters GDP after weak inflation data. This is only the first estimate so it could grow more over the next 2 estimates.

GDP Percent Change