GDP Grew at a 2.5% Annualized Rate in the 2nd Quarter
The Bureau of Economic Analysis released its “advance” estimate of growth in the inflation-adjusted (“real”) gross domestic product (GDP) for the 2nd quarter of 2006 (available at http://www.bea.gov/bea/newsrelarchive/2006/gdp206a.pdf ).
GDP growth in the 2nd quarter was estimated to have been an annualized 2.5% rate, an expected moderation following the rapid 5.6% rate of growth in the 1st quarter.
Highlights:
- The deceleration in GDP growth primarily reflected reduced growth in personal consumption spending, business equipment and software spending, exports, federal government spending, and residential investment.
- The personal consumption expenditure (PCE) price index excluding volatile food and energy prices, one of the Fed’s preferred measure of consumer prices, grew at an annualized 2.9% rate relative to the 2nd quarter, an acceleration from 2.1% in the 1st quarter. The 2nd-quarter 2.9% rate of inflation is above the Fed’s comfort zone.
GDP growth in the 2nd quarter was estimated to have been an annualized 2.5% rate, an expected moderation following the rapid 5.6% rate of growth in the 1st quarter.
Highlights:
- The deceleration in GDP growth primarily reflected reduced growth in personal consumption spending, business equipment and software spending, exports, federal government spending, and residential investment.
- The personal consumption expenditure (PCE) price index excluding volatile food and energy prices, one of the Fed’s preferred measure of consumer prices, grew at an annualized 2.9% rate relative to the 2nd quarter, an acceleration from 2.1% in the 1st quarter. The 2nd-quarter 2.9% rate of inflation is above the Fed’s comfort zone.