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Bad News for Economic Growth as Q2 2012 GDP is Revised Down to 1.25%

Q2 2012 real GDP now shows 1.25% annualized growth after revisions. The advance second quarter GDP estimate was 1.5%, whereas the second revision reported 1.7% GDP growth. The BEA rounds their final GDP numbers, so the actual GDP reported was 1.3%. When we're grabbing economic crumbs, 0.05 percentage points makes a difference.

 

 

What the Q2 GDP third estimate shows is a barely breathing economy. Businesses shed inventories, consumers spent way less, a dramatic swing from the Q2 GDP advance report and investment generally is down from the 1st quarter. Shedding inventories can be a recession indicator. Durable goods spending literally vanished in Q2, also a recession indicator. The drought showed up in Q2 GDP, negatively impacting farm inventories and potentially other GDP components indirectly.

Nation's Current Account Deficit Declines by 12.1% for Q2 2012

The U.S. international transactions release is an odd duck. The current account is kind of like an economic income statement of the U.S. vs. the rest of the world. The current account deficit was $117.4 billion for Q2 2012, a 12.1% decline from Q1's current account deficit of $133.6 billion.

 

Trade Deficit No Change, Increased 0.25% for July 2012

The U.S. July 2012 monthly trade deficit was essentially unchanged, and increased 0.25%, or $103 million, from June to $42.002 billion. Exports decreased $1.81 billion, or -0.98%. Imports declined $1.81 billion, or -0.80%. June's trade deficit was revised from $42.924 billion to $41.899 billion.

 

Trade Deficit Drops -10.7% to $42.9 Billion for June 2012

The U.S. June 2012 monthly trade deficit declined $5.12 billion to $42.924 billion. This is a -10.66% monthly decrease in the trade deficit, mainly due to increased exports. Exports increased $1.666 billion, or +9.09%. Imports declined $3.454 billion, a -1.49% decrease from May and mainly due to lower crude oil prices. This is the smallest monthly trade deficit in 18 months.

 

Trade Deficit for May 2012 - $48.7 Billion

The U.S. May 2012 monthly trade deficit declined $1.91 billion to $48.68 billion. This is a 3.78% monthly decrease in the trade deficit, all due to reduced imports. Exports decreased $359 million, or -0.20%. Imports declined $1.55 billion, which is a -0.67% decrease from April. The decline in oil prices is the reason the trade deficit shrank for the month.

 

Trade Deficit for March 2012 - $51.8 Billion, Little Effect on Q1 GDP Revision

The U.S. March 2012 trade deficit jumped $6.41 billion to $51.83 billion in a month. This is a 14.1% monthly increase in the trade deficit. Exports increased $5.28 billion, a 2.9% increase from last month. Imports increased $11.69 billion, which is a 5.15% increase from February.

 

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