The first look at second quarter growth
Prior was 2.0% (revised to 2.2%)
Personal consumption +4.0% vs +3.0% expected
Prior personal consumption +0.9% (revised to +0.5%)
Personal consumption added 2.69 percentage points to growth
Inventories cut 1.00 percentage points from growth
Exports +9.3%
Imports +0.5%
Net exports added 1.06 pp to GDP
Final sales to private domestic buyers +4.3%
Home investment -1.1%
Business investment +7.3%
Fixed investment added 0.94 pp to growth
Government consumption added 0.37 pp to GDP
2017 GDP revised to 2.2% from 2.3%
2017 personal savings revised to +6.7% from +3.4%
Inflation readings
GDP price index +3.0% vs +2.3% expected
Prior GDP price index +2.2%
Core PCE +2.0% vs +2.2% expected
Prior core PCE +2.3%
The personal consumption reading is impressive and it might help to put a floor under USD/JPY. On second look, there is a lot to like about this report and it's likely to mean estimates for the remainder of the year are bumped up.
Inventories were expected to add to GDP but they were a big drag. Trade was strong on some soybean moves and tariff shuffles (people buying before tariffs hit); that's not sustainable but consumption was very strong and that is sustainable.
