The Bureau of Economic Analysis released a first look at inflation-adjusted (“real”) gross domestic product (GDP) for the 2nd quarter of 2005. Annualized GDP growth in the 2nd quarter was estimated at 3.4%; growth was 3.8% in the 1st quarter.
Highlights (released by the Joint Economic Committee) of the BEA report include:
- The major contributors to GDP growth in the 2nd quarter were personal consumption expenditures (which grew 3.3%), exports (which grew 12.6%), business equipment and software spending (which grew 11.0%), residential fixed investment (which grew 9.8%), and government spending (federal government spending grew 1.3%, state and local government spending grew 2.4%). Imports, which are a subtraction from GDP, decreased 2.0%.
- The real change in private inventories subtracted 2.32 percentage points from growth in the second quarter, suggesting that inventory rebuilding may boost growth in the second half of the year.
- Growth in the personal consumption expenditures (PCE) price index excluding food and energy prices, the Federal Reserve’s preferred measure of consumer price inflation, decelerated to an annualized 1.8% in the 2nd quarter from 2.4% in the 1st quarter.
