GDP Growth Accelerates in Second Quarter

Real gross domestic product (GDP) increased 1.7 percent in the second quarter of 2013 after increasing 1.1 percent in the first quarter, according to the “advance” estimate released today by the Bureau of Economic Analysis (BEA).

731_gdp_1GDP highlights
The second-quarter acceleration in GDP reflected the following:
• An upturn in business investment, mainly in structures.
• An upturn in exports of goods; civilian aircraft and parts turned up, and nonautomotive consumer goods accelerated.

These contributions to the pick-up in economic growth were partly offset by an acceleration in imports and decelerations in inventory investment and in consumer spending.

Personal income and personal saving
Real disposable personal income—personal income adjusted for taxes and inflation—rose 3.4 percent in the second quarter after falling 8.2 percent in the first quarter.

Dividend income as well as wages and salaries increased notably in the second quarter, following large declines in the first quarter. The first-quarter declines reflected accelerated payments (mainly dividends) in the fourth quarter of 2012. Also, contributions for government social insurance (a subtraction when calculating personal income) slowed in the second quarter, reflecting the expiration of the “payroll tax holiday” in the first quarter.

Personal saving as a percent of disposable personal income in the second quarter was 4.5 percent, compared with 4.0 percent in the first quarter.

Prices of goods and services purchased by U.S. residents rose 0.3 percent in the second quarter after rising 1.2 percent in the first quarter. Excluding food and energy, prices increased 0.8 percent after increasing 1.4 percent.

Comprehensive revision
BEA released its 2013 comprehensive revision of the national income and product accounts, which incorporates new source data and a host of improvements. The revisions did not change the overall picture of the economy.

For 2002–2012, the average annual GDP growth rate was 1.8 percent, compared with 1.6 percent in the previous estimates. For 2012, GDP growth was revised up to 2.8 percent from 2.2 percent.

For more on GDP, read the full report.

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