Preliminary 2nd Qtr 2008 GDP Beats Estimates

Real gross domestic product -- the output of goods and services produced by labor and propertylocated in the United States -- increased at an annual rate of 3.3 percent (consensus was 2.7%) in the second quarter of 2008, (that is, from the first quarter to the second quarter), according to preliminary estimates released by theBureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent. The GDP estimates released today are based on more complete source data than were available forthe advance estimates issued last month. In the advance estimates, the increase in real GDP was 1.9percent (see "Revisions" on page 3).
The increase in real GDP in the second quarter primarily reflected positive contributions fromexports, personal consumption expenditures (PCE), federal government spending, nonresidentialstructures, and state and local government spending that were partly offset by negative contributionsfrom private inventory investment, residential fixed investment, and equipment and software. Imports,which are a subtraction in the calculation of GDP, decreased. The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease inimports, an acceleration in exports, an acceleration in PCE, a smaller decrease in residential fixedinvestment, and an upturn in state and local government spending that were partly offset by a largerdecrease in inventory investment.