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.
The U.S. current-account deficit-the combined balances on trade in goods and services, income, and net unilateral current transfers – decreased to $98.5 billion (preliminary) in the second quarter of 2014 from $102.1 billion (revised) in the first quarter of 2014. As a percentage of U.S. GDP, the deficit decreased to 2.3 percent from 2.4 percent. The previously published current-account deficit for the first quarter was $111.2 billion.
- The deficit on international trade in goods increased to $189.2 billion from $182.3 billion as goods imports increased more than goods exports.
- The surplus on international trade in services increased to $58.9 billion from $57.8 billion as services exports increased more than services imports.
- The surplus on primary income increased to $53.1 billion from $52.4 billion as primary income receipts increased more than primary income payments.
- The deficit on secondary income (current transfers) decreased to $21.4 billion from $30.0 billion as secondary income receipts increased and secondary income payments decreased.
Net U.S. borrowing from financial-account transactions was $17.6 billion in the second quarter, down from $91.2 billion in the first.
- Net U.S. acquisition of financial assets excluding financial derivatives was $232.7 billion in the second quarter, up from $143.3 billion in the first.
- Net U.S. incurrence of liabilities excluding financial derivatives was $247.4 billion in the second quarter, up from $239.8 billion in the first.
- Net borrowing in financial derivatives other than reserves was $2.8 billion in the second quarter, a shift from net lending of $5.3 billion in the first.
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