Q1 2013 real GDP came in at 2.5% This is an improvement, from the stagnant economy GDP in the 4th quarter implied. Government spending declines continue to be a drag on the economy and sucked out -0.9 percentage points from 1st quarter real gross domestic product growth. Imports increased and cost the United States -0.9 percentage points of Q1 GDP. Investment recovered on changes to farm private inventories. Consumer spending increased from Q4 as well. Generally speaking 2.5% GDP implies moderate economic growth, yet overall demand in the economy is weak.
Q4 2012 real GDP was revised upward by 0.3 percentage points to 0.4% after the second revision. While an improvement, gross domestic product results still imply a stagnant economy in the 4th quarter. Government spending declines were the drag on the economy and sucked out -1.41 percentage points from 4th quarter real gross domestic product growth. Federal defense spending alone declined 22.1% from Q3. Nonresidential fixed investment was revised higher and businesses purchased equipment and software. Private inventory changes hacked off -1.52 percentage points from Q4 real GDP as businesses shed their inventories. Even without inventories in the economic growth mix, the economy is still suffering from weakness in demand.
Q4 2012 real GDP grew by just 0.1% after the second revision. While technically not in contraction, 4th quarter gross domestic product results imply the economy was officially D.O.A. Trade imports plunged, which helped economic growth. Government spending cliff dove and sucked out -1.38 percentage points from 4th quarter real gross domestic product growth as federal defense spending declined 22.0% from Q3. Private inventory changes hacked off -1.55 percentage points from Q4 real GDP as businesses shed their inventories. Even without inventories in the economic growth mix, the economy is still suffering from weak demand.
Q4 2012 real GDP contracted by -0.1%. Inventory investment nose dived, but was not the lone culprit for economic contraction. Exports plunged and took -0.81 real GDP percentage points along with it. Government spending cliff dove and hacked off -1.33 percentage points from 4th quarter gross domestic product as Federal Defense spending declined 22.2% from Q3.
Q3 2012 real GDP shows 3.1% annualized growth, revised from 2.7% in the second estimate. Consumer spending increased more than previously estimated, exports were greater and imports were much less. Q2 GDP was 1.25% in actuality, 1.3% is a rounded figure.
Q3 2012 real GDP shows 2.7% annualized growth, revised from 2.0% in the advance report. There was a significant upward revision to inventories, yet consumer spending was revised down. Exports were revised up as trade statistics became more complete. Q2 GDP was 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.
With the release of Q2 2012 GDP, we had a slew of shocking revisions, going back all the way to Q1, 2009. How can this be? How can gross domestic product be wrong, three years after the fact? Below is the original GDP reported (blue) and the new with revisions (red).
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