Posts Tagged 'Corporate Profits'

GDP Growth Accelerates in Third Quarter

Real gross domestic product (GDP) increased 2.7 percent in the third quarter of 2012 after increasing 1.3 percent in the second quarter, according to estimates released today by the Bureau of Economic Analysis. The third-quarter growth rate was revised up 0.7 percentage point from the advance estimate released in October.

Real GDP third-quarter highlights
The acceleration in third-quarter growth was mainly driven by a rebound in inventory investment. Nonfarm inventory investment turned up. In contrast, farm inventory investment declined more than in the second quarter, reflecting the drought in the Midwest.

In addition, consumer spending on durable goods turned up, notably on motor vehicles and parts. Federal government spending on national defense turned up. And residential housing accelerated, as investment in single-family structures picked up.

Offsetting these contributions to real economic growth, consumer spending on services slowed, and business investment turned down, as spending on equipment and software and on nonresidential structures declined.

Revisions to GDP
The upward revision to real GDP growth in the third quarter of 2012 mainly reflected a large upward revision to private inventory investment, mostly in manufacturing and wholesale trade. In addition, goods exports was revised up, partly reflecting a revision to industrial supplies and materials. In contrast, consumer spending on both goods and services was revised down. Business investment was also revised down, reflecting a revision to equipment and software.

For more information, see the technical note.

Corporate profits
BEA released its preliminary estimate of third-quarter corporate profits. Profits accelerated in the third quarter, rising 3.5 percent at a quarterly rate after rising 1.1 percent in the second quarter.

Profits of financial corporations rose 18.3 percent, while profits of nonfinancial corporations fell 0.1 percent. Profits from the rest of the world decreased 0.6 percent.

For more, here’s the full report.

GDP Growth Slows in Second Quarter

Real gross domestic product (GDP) rose 1.3 percent in the second quarter of 2012 after rising 2.0 percent in the first quarter, according to the third estimate released today by the Bureau of Economic Analysis. The second quarter growth rate was revised down from the second estimate released in August.

Second-quarter highlights

• Consumer spending decelerated, reflecting a downturn in durable goods, mainly in autos.
• Business investment slowed, led by a downturn in spending for power and communication structures.
• Residential housing also slowed in the second quarter.

Offsetting these reductions in real GDP growth were smaller decreases in federal government spending and in state and local government spending as well as a step-up in exports.

Revisions to GDP
The downward revision to second-quarter real GDP growth reflected a downward revision to inventories, mainly to farm inventories, which were revised down due to this summer’s severe heat and drought. In addition, consumer spending for services was revised down, reflecting a downward revision to finance and insurance. Exports was revised down as well.

Personal income and saving
Real disposable personal income (DPI), which adjusts personal income for taxes and inflation, rose 3.1 percent in the second quarter, compared with 3.7 percent in the first quarter. The personal saving rate—personal saving as a percentage of DPI—rose to 4.0 percent from 3.6 percent.

Corporate profits
Second-quarter corporate profits turned up, rising 1.1 percent at a quarterly rate, following a 2.7 percent decline in the first quarter. Second-quarter nonfinancial profits rose 2.6 percent, and financial profits fell 9.3 percent. Profits from the rest of the world rose 8.3 percent in the second quarter, reflecting a 1.6 percent increase in receipts and a 10.3 percent decline in payments.

For more, here’s the full report.