Big point: the biggest components of the GDP beat, Inventories and Trade, were estimated. In other words, assume that future revisions of Q2 GDP will be lower, not higher
Q2 GDP Surges 4%, Beats Estimates Driven By Inventories, Fixed Investment Spike; Historical Data Revised
Horse hockey.
probably closer to zero once revised down.
...in the process throwing everyone's trendline calculations off as yet another GDP redefinition was implemented.
In other words, they are simply making these numbers up. They are completely meaningless, driven only by the propaganda machine.
All the talking points will be about this , and after the downward adjustments it will zero out somewhere down the road and only reported in some cattle futures magazine in Omaha that nobody reads
Freegards
LEX
Meanwhile, ADP says job hires were well “below expectations”.
Obama’s Commerce Department is full of it.
Not a smidgen of accurate data...
GDP is almost always revised down. That being said it’s not surprising (4% is a huge number but nobody believes it. Just like the -2.9% in 1Q - revised to -2.1% today - is not indicative). At the end of the day the economy will grow 1.5-2.0% for the full eyar. Right where we have been the last couple of years.
More government BS.
Surge in inventories. That’s got to be channel-stuffing; manufacturers pushing out goods to wholesalers. There will be no sell-through to the retail level; people simply don’t have any discretionary cash anymore. Rent, food, fuel and healthcare inflation and debt service take care of that. Watch for major adjustment of Q2 in the Q3 report.
supplied with copious amounts of 0’Mullah’s Dep’t. of Truth “special sauce” no Doubt.
Analysis from Stone McCarthy Research:
Stone & McCarthy (Princeton) - This update contains our first impressions of the release of the U.S. GDP data. A full analysis will be available later as a separate update.
The BEA’s advance estimate of real GDP growth for Q2 2014 GDP growth was reported at 4.0% SAAR. The Q2 growth rate follows a 2.1% drop in real GDP in Q1 (previously -2.9%). The Q2 results were much stronger than expected. Consumer spending was firm, particularly for durable goods.
Non-residential fixed investment and exports also contributed to the gain.
Note: Previously reported data have been revised. The data incorporated in today’s report reflects the regular annual revision of the national income and product accounts (NIPAs), beginning with the estimates for the first quarter of 1999. Annual revisions, which are usually released in July, incorporate source data that are more complete, more detailed, and otherwise more reliable than those previously available.
Our estimate of 2.3% GDP growth compared with the median consensus of 3.0%. Market estimates ranged from 1.9% to 5.2%.
The FOMC is likely to regard the second quarter rise as a rebound from the soft first quarter. In the near-term it should not change the Committee’s overall outlook for winding down the asset purchase program, or advance the timing of the first hike in the fed funds rate.
Real PCE was strong, rising 2.5% in Q2 versus 1.2% in Q1.
In particular, PCE for goods rose by 6.2% SAAR versus 1.0% in Q1. However, PCE for services was 0.7%, down from +1.3% in Q1. The contribution to GDP from PCE was 1.69% versus our estimate of 1.1%.
Nonresidential fixed investment rose 5.5% versus +1.6% in Q1. Particularly, spending on structures rose 5.3%, up from +2.9% in Q1.
The contribution to GDP from inventories was +1.66% versus -1.16% in Q1 and -0.34% in Q4. We were expecting inventories to contribute 1.0% to GDP.
Exports made a positive contribution of 1.23% to GDP versus -1.30% in Q1.
The GDP price index rose at a 2.0% SAAR versus 1.3% in Q2 and 1.5% in Q1 2014.
LOL
wait 4-6 weeks for the ‘revised’ numbers and you’ll see it’s been a loss...again
(Checks Calendar....)
Yup. It’s an Election Year.
WSJ:
Takeaways from Wednesday’s GDP Report
Economic output rebounded during the second quarter, advancing at a 4% rate, and the large decline during the first quarter was revised down slightly, to a 2.1% decline from a 2.9% drop, according to estimates published by the Commerce Department on Wednesday.
Here are five quick takeaways from the report on gross domestic product, the broadest measure of goods and services produced across the economy:
30 Jul 2014 8:40am
Winter Rebound
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Wednesday’s GDP report shows a big jump in consumer spending on durable goods, such as cars and appliances, during the second quarter, a sign that consumers may have been playing catch-up after a rough winter. Spending on total goods accounted for its highest contribution to GDP since late 2010, and spending on durable goods was near a five-year high, led by a big jump in autos. Business investment also rebounded, with non-residential fixed investment up 5.5% in the second quarter after a gain of 1.6% in the first quarter.
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Housing’s Hiatus
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Housing contributed positively to economic growth during the second quarter—residential fixed investment added 0.23 percentage point to GDP—after subtracting from growth in the past two quarters. One reason why the current recovery has been considerably weak: It hasn’t enjoyed as strong a contribution from the housing sector as in past recoveries. Housing, which stopped being a drag on growth in 2011, added a small boost in 2012 and most of 2013. The decline that began last fall wasn’t actually due to a slowdown in home construction, but instead reflected a drop in brokers’ real-estate commissions after sales of previously owned homes slumped.
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Revisions Redux
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The second-quarter rebound in GDP looks even better in light of the fact that the last six months of 2013 was revised up, with growth advancing at the strongest pace since 2003, according to annual revisions to economic growth published by the Commerce Department on Wednesday. GDP in the third and fourth quarters increased at an annual pace of 4.5% and 3.5%, respectively, up from earlier estimates of 4.1% and 2.6%. The estimate of a 2.9% contraction for the first quarter, meanwhile, was revised up to a 2.1% decline.
The Fed’s Focus
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The latest GDP figures aren’t likely to immediately influence Federal Reserve policy makers as they conclude their two-day meeting this afternoon. The central bank is expected to cut its monthly bond purchases by another $10 billion. But the Fed’s forecast of economic growth in June projected annual growth of 2.1% to 2.3%. With the latest report, growth would need to exceed 3% in the second half to stay close to that forecast. Wednesday’s report also showed inflation narrowly exceeded the Fed’s 2% target during the quarter.
Bloomberg
The States Brighten
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Government spending turned positive in the second quarter after a sharp slowdown at the end of last year following the government shutdown. Government spending, which remained negative during the first quarter, rose 1.6% in the second quarter, and it was powered by state and local government spending, which was up 3.1% from the prior quarter, the largest such increase since 2009. State and local government spending boosted GDP by 0.35 percentage point, also a five-year high.
Unprecedented and unexpected!
GDP=Gross Depression Propaganda
Comrades! Comrades! The chocolate ration has been increased!!
Bull friggin’ crap... wait for this number to revised downward to 0.3% in about a month or two.