First Estimate of Second-Quarter GDP at 2.1% Topping Consensus

Real GDP at 2.1% topped the consensus estimate of 1.9%, the GDPNow forecast of 1.3, and Nowcast at 1.5% (revised today).

The BEA reports Real Gross Domestic Product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019 according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1 percent.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Contributions to GDP

  • PCE: +2.85
  • Fixed Investment Non-Residential: -0.14
  • Fixed Investment Residential: -0.06
  • Change in Private Inventories: -0.86
  • Exports -0.63
  • Imports: -0.01
  • Government: +0.85

These numbers will be revised at least twice as more data comes in.

Interestingly, government spending and CIPI nearly balanced out. Retail spending held up.

Government spending up nearly a full percentage point is not a good thing but expect more of it.

These aren't recession-looking numbers but GDP is hugely backward looking.

Mike "Mish" Shedlock

Comments (7)
No. 1-7

It just got harder for the Fed to justify the expected rate cut...



GDP is backward looking. Fed has all but promised a 0.25% rate cut. If they give a negative surprise then the markets will sell off and they know it. After jawboning the markets higher for months, that would be extremely counterproductive.

Something in the economy has started going south and they want to arrest it. Ordinary people will only know what happened after it is obvious to everyone.


trillion dollar deficit spending boosting gdp. you be the judge .


Zerohedge had an article showing the biggest rise in consumer spending was on recreational vehicles. Maybe people will be living in mobile homes instead of houses.