The initial Q3 GDP estimate is a not very enticing 1.5%. Consumer spending was still relatively healthy but the contraction in inventories change eradicated 1.44 points of economic growth. Imports and exports somewhat negated each other. Government contributed a small amount of growth to GDP.
Our August trade deficit rose by 15.6% from July as the value of our exports fell and the value of our imports rose. The Census report on our international trade in goods and services for August indicated that our seasonally adjusted goods and services trade deficit rose by $6.5 billion to $48.3 billion in August from a July deficit which was revised from $41.9 billion to $41.8 billion.
Q2 GDP has been revised upward again to 3.9%. Originally Q2 GDP was reported as 2.3% and then increased to 3.7%. The reason for the higher GDP revision is consumer spending was revised upward by over a quarter of a percentage point. Consumer spending was 62% of real GDP. The revision is yet another surprise since GDP is now 70% greater than the original estimate.
Our July trade deficit fell by 7.3% from June as the value of our exports rose and the value of our imports fell. The Census report on our international trade in goods and services for July indicated that our seasonally adjusted goods and services trade deficit fell by $3.3 billion to $41.9 billion in July from a June deficit which was revised from $43.8 billion to $45.2 billion.
Q2 GDP has been significantly revised upward from 2.3% to 3.7%. Investment was dramatically revised upward as was spending by state and local governments. Consumer spending was a healthy 57.2% of real GDP. Also surprising was a lack of upward revisions in imports. Regardless, that is a 1.37 percentage point GDP revision, a 59% change from the advance report.
Our trade deficit increased by 7.1% in June as the value of our exports fell and the value of our imports rose. The Census report on our international trade in goods and services for June indicated that our seasonally adjusted goods and services trade deficit rose by $2.9 billion to $43.8 billion in June from a May deficit which was revised from $41.9 billion to $40.9 billion.
For the second quarter GDP bounced back to 2.3%. The BEA revised the national accounts back three years and now Q1 GDP is 0.6% instead of the -0.2% previously reported. The revisions may have improved Q1 2015 Gross Domestic Product, but on average, lowered GDP for the last three years by 0.3 percentage points. From 2011 to 2014 real GDP was 2.0% instead of the previous average of 2.3%. That's quite a stunt in economic growth overall.
If is official. It happened. First quarter 2015 real GDP just went negative with a -0.7% contraction. Remember folks, two consecutive quarters of negative growth can make up an official recession. In reality the revision is a one percentage point slide. Psychologically speaking, contraction isn't too swift as it often pricks bubble minds that blow hot air all over as they deflate. The reason for the negative revision is imports.
First quarter 2015 real GDP is a measly, pathetic 0.2%. That's quite disappointing, and just shavings and crumbs away from contraction. Consumer spending was less than half of the contribution Q4 brought and exports imploded. While some think this is a report to ignore, that economic growth will spring back, we think this is quite a foreboding of bad news.
Fourth quarter 2014 real GDP was revised 0.4 percentage points lower to 2.2%. That's quite disappointing, although still mediocre growth. The reason for the revision reduction was inventories did not grow nearly as much as originally estimated and imports increased. Real consumer spending was barely revised. Overall Q4 GDP cutting isn't that surprising, more Q3 GDP's lack of trade deficit impact was.
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