Second quarter GDP rose 2.6%, slightly less than the 2.7% pace expected, while first quarter growth was revised down modestly to a 1.2% pace from 1.4% rate previously reported, data released Friday by the Bureau of Economic Analysis showed.
The combination of the downward revision to first quarter GDP and the smaller-than-expected reading for second quarter GDP suggests a slower start to 2017 that previously seen. Annual revision back to 2014 were included with the data pointed to little change in the recent growth picture, with 2016 growth revised modestly lower, but 2014 and 2015 GDP growth moved up slightly from their previous estimates.
The core PCE price index rose only 0.9% in the second quarter after rising a revised 1.8% in the first quarter, the smallest quarterly increase since 0.9% in the first quarter of 2015.
On a year/year basis, second quarter core PCE prices were up 1.5% from a year earlier following a 1.8% year/year rise in the first quarter and a 1.9% year/year gain in the fourth quarter. The year/year rate for the second quarter was the smallest since the fourth quarter of 2015, when it was 1.3%.
The overall GDP price index was up 1.0% in the second quarter after downward revised 2.0 pace of growth for the first quarter.
PCE was up 2.8% in the second quarter after a 1.9% rise in the first quarter. The acceleration in second quarter PCE was led by durables PCE, which was up 6.3% after a 0.1% first-quarter decline. Nondurables PCE was up 3.8% in the second quarter compared with 1.1% in the first quarter, while services PCE slowed to a 1.9% growth rate from 2.5% in the previous quarter.
The net export gap narrowed to $614.9 billion for the second quarter from $622.2 billion in the first quarter.
Government spending was up 0.7% in the second quarter after a 0.6% decline in the first quarter.
Nonresidential fixed investment rose by 5.2% in the second quarter, down from 7.2% in the first quarter, due in large part to a slowdown in structures.
Residential fixed investment was down 6.8% in the second quarter, after a 11.1% gain in the first quarter.
Inventories were down $0.3 billion in the second quarter after a 1.2% gain in the first quarter. When the inventory component is removed, real final sales were up 2.6% in the second quarter after a 2.7% gain in the first quarter.
