WASHINGTON — Second quarter GDP growth was revised up to a 3.0% annual rate from the 2.6% pace in the advance estimate, data released Wednesday by the Bureau of Economic Analysis showed.
The larger-than-expected upward adjustment to 2Q growth was due to stronger PCE and fixed investment growth than previously reported. There was also an upward revision to inventory growth, now a small positive, and a smaller net export gap. The only negative was a downward adjustment to government spending, particularly state and local spending.
Within consumption, there were upward revisions to both goods and services, while the upward revision to fixed investment was the result of both stronger nonresidential fixed investment growth and a smaller, though still large, decline in residential fixed investment growth.
As a result of the mix of revisions, real final sales were revised up to a 3.0% gain from the 2.6% increase in the advance estimate.
The first estimate of second quarter Gross Domestic Income was a 2.9% gain, up from 2.7% in the first quarter. This puts the GDP/GDI average at a 3.0% gain for the second quarter, stronger than the 2.0% increase seen in the first quarter.
The key price measures were generally unrevised in the second estimate for the quarter. The chain price index is still up 1.0% in the second quarter, as expected, remaining below the 2.0% gain seen in the first quarter.
The closely watched core PCE price index was unrevised from 0.9% rate posted in the advance estimate. As a result, the year/year rate for the measure remained at 1.5%, still below the 1.8% rate seen in the first quarter.
Overall, the data suggest a stronger rebound from the first quarter's slowdown than previously reported, led by PCE, with price gains still contained. Looking ahead, strong retail sales figures in July suggest PCE had a solid start to the third quarter.
