State personal income growth accelerated to 1.5 percent on average in the second quarter of 2014 from 1.2 percent in the first quarter. Personal income growth ranged from 2.7 percent in North Dakota and Nebraska to 1.1 percent in New York and Alaska, with growth accelerating in 36 states. Inflation, as measured by the national price index for personal consumption expenditures, accelerated to 0.6 percent in the second quarter from 0.3 percent in the first quarter.
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Real gross domestic product (GDP) increased 4.6 percent in the second quarter of 2014, according to the “third” estimate released by the Bureau of Economic Analysis. The second-quarter growth rate was revised up 0.4 percentage point from the “second” estimate released in August. In the first quarter, real GDP decreased 2.1 percent.
Exports of notably nondurable industrial supplies and materials and nonfarm inventory investment by motor vehicle dealers accounted for much of the upturn in real GDP.
In addition, business investment accelerated, mainly in information processing equipment, as did consumer spending, mainly on motor vehicles and parts.
In contrast to these contributions, imports (a subtraction in the calculation of GDP) were higher in the second quarter than in the first quarter.
The 0.4 percentage point revision to second-quarter GDP growth primarily reflected the following:
- Business investment was revised up, notably manufacturing structures.
- Exports were revised up, notably travel services.
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Corporate profits increased 8.4 percent at a quarterly rate in the second quarter after decreasing 9.4 percent in the first quarter. The second quarter increase was the largest since the third quarter of 2010.
- Profits of nonfinancial corporations rose 11.9 percent after falling 7.4 percent.
- Profits of financial corporations rose 8.0 percent after falling 17.1 percent.
- Profits from the rest of the world fell 0.9 percent after falling 6.1 percent.
Over the last 12 months, corporate profits rose 0.1 percent.
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Real spending on travel and tourism turned up in the second quarter of 2014, increasing at an annual rate of 2.1 percent after decreasing 1.1 percent (revised) in the first quarter of 2014. Real gross domestic product (GDP) also experienced an upturn, increasing 4.2 percent (second estimate) in the second quarter after decreasing 2.1 percent in the first quarter. All major categories, with the exception of “traveler accommodations” contributed to the increase in the second quarter.
The leading contributors to the upturn in the second quarter were “recreation, entertainment, and shopping,” and “food services and drinking places.” “Recreation, entertainment, and shopping” increased 4.5 percent in the second quarter after decreasing 2.7 percent in the first quarter. “Food services and drinking places” increased 6.5 percent after decreasing 1.8 percent. “Transportation” increased as well, reflecting an upturn in “passenger air transportation” that was partly offset by a downturn “all other transportation-related commodities.” Partially offsetting these upturns, “traveler accommodations” decreased 0.8 percent in the second quarter after increasing 0.6 percent.