The first look at second quarter growth numbers for 2017
- Q1 was 1.4% (prior was +1.2%)
- Personal consumption 2.8% vs 2.8% exp
- Prior personal consumption +1.1% (revised to +1.9%)
- GDP price index 1.3% vs 1.0%
- Prior GDP price index 1.9% (revised to 2.0%)
- GDP deflator +1.0% vs +1.3% exp
- Core PCE q/q +0.7% vs +0.9% exp
- Prior core PCE 2.0% (revised to 1.8%)
Lots of moving parts here. The negative revision to Q1 stands out because it came despite a big upward revision to personal consumption.
Overall, the US dollar is slumping on the data.
Details:
- Consumer spending on durables +6.3%
- Business investment +5.2%
- Investment in equipment +8.2%
- Investment in IP +1.4%
- Exports +4.1%
- Imports +2.1%
- GDP ex motor vehicles +2.7%
- Business inventory change -$0.3B
- Benefit costs +0.6% vs +0.7% prior
- Wages/salaries +0.5% vs +0.8% prior
The good news here is the reading on business investment, which was also strong in Q1. That's a good sign for future growth and productivity after many quarters of sluggish growth. Another positive signal is that all the growth came despite flat inventories, so it's a true +2.6% reading.
The downside is that even with 2.6% growth, the pace for the first half of the year was only 1.9%. It would take a monster H2 to get to the 3% reading that many were expecting at the start of the year.
