JAKARTA (TheInsiderStories) – US’s economic growth increased at an annual rate of 1.2 percent in the second quarter (Q2) of 2016, according to the advance estimate released by the Bureau of Economic Analysis. In the Q1, real gross domestic product (GDP) increased 0.8 percent (revised).
The Bureau explained, the acceleration in real GDP growth in the second quarter reflected an acceleration in personal consumption expenditures, an upturn in exports, and smaller decreases in nonresidential fixed investment and in federal government spending. These were partly offset by a larger decrease in private inventory investment, and downturns in residential fixed investment and in state and local government spending.
Personal consumption, which accounts for more than two-thirds of economic output, expanded at a 4.2 percent–the best gain since late 2014–outlays on goods advanced 6.8 percent while spending on services climbed 3 percent.
But nonresidential fixed investment, a measure of business spending, declined at a 2.2 percent and companies spent less on buildings and equipment. The change in private inventories subtracted 1.16 percentage points from overall growth.
Residential fixed investment, including on home building and major improvements, fell at a 6.1 percent pace during the second quarter. International trade, however, was a positive, adding 0.23 percentage point to overall growth.
Exports in the quarter rose at a 1.4 percent while imports fell slightly. Spending at all levels of government declined at a 0.9 percent during the quarter, led by a decrease in federal defense spending.
Current-dollar GDP increased 3.5 percent or US$155.9 billion, in the Q2 to a level of $18,437.6 billion from Q1, current dollar GDP increased 1.3 percent (revised), or $58.9 billion. The price index for gross domestic purchases increased 2.0 percent in the second quarter, compared with an increase of 0.2 percent in the first (revised).
Current-dollar personal income increased $111.4 billion in the second quarter, compared with an increase of $52.8 billion in the first (revised). The acceleration in personal income primarily reflected upturns in wages and salaries, personal dividend income, and farm proprietors’ income that were offset by slowdowns in personal current transfer receipts.
Disposable personal income increased $106.3 billion, or 3.1 percent, in the second quarter, compared with an increase of $83.4 billion, or 2.5 percent, in the first (revised). Real disposable personal income increased 1.2 percent, compared with an increase of 2.2 percent.
Personal saving was $763.1 billion in the second quarter, compared with $847.8 billion in the first (revised). The personal saving rate — personal saving as a percentage of disposable personal income — was 5.5 percent in the second quarter, compared with 6.1 percent in the first.
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Source: The Insiderstories
US economic growth slightly improves to 1.2% in Q2