US Q2 GDP Beats Expectations, Core PCE Lower Than Preliminary

Bolstered by consumption,the U.S.economy has once again demonstrated resilience beyond expectations.

On September 26th,the U.S.Bureau of Economic Analysis released a report showing that the U.S.second-quarter real GDP annualized quarter-over-quarter final value was 3%,slightly higher than the expected 2.9%.The previously announced revised value was 3%,and the initial value was 2.8%.In the first quarter,the U.S.real GDP grew by 1.6%.

In terms of inflation,the U.S.second-quarter PCE price index annualized quarter-over-quarter final value was 2.5%,the same as the previous estimate; the core PCE price index annualized quarter-over-quarter final value was 2.8%,in line with expectations and the previously announced revised value,with the initial value being 2.9%.

At the same time,the agency's annual comprehensive report indicates that the U.S.economic growth rate in recent years may have been stronger than imagined by outsiders.

From the second quarter of 2020 to 2023,the GDP growth rate,adjusted for inflation,averaged 5.5%,revised up by 0.4 percentage points from the previously announced 5.1%.Over the five years ending in 2023,the U.S.economy's growth was $294.2 billion higher than previously reported.Approximately two-thirds of the revision is attributed to increased consumer spending.

Last year's GDP growth rate was revised up from 2.5% to 2.9%,although the adjustments were concentrated in the first half of the year,with both the third and fourth quarter GDPs being revised down.

The second-quarter GDP and initial claims data both exceeded expectations,easing concerns about a recession.

The second-quarter economic data slightly exceeded Wall Street expectations,but the market remained relatively stable,and U.S.Treasuries continued to rise.

Prior to this,the market generally expected that GDP would be slightly revised down from 3% to 2.9%.Goldman Sachs was more pessimistic,pointing out that due to the downward adjustment of non-residential construction,service consumption,and equipment investment,last year's GDP growth rate would be revised down by 0.3-0.4%.These revisions combined would reduce the second-quarter GDP year-over-year growth rate from 3.1% to 2.7%.The labor market is also sending positive signals.Data released on Thursday showed that the number of initial jobless claims in the United States last week fell to 218,000,better than expected,marking a five-month low.

The unexpected absence of a downward revision to Q2 GDP and the better-than-expected decline in initial claims temporarily eased market concerns about the U.S.economy.

In Q2: Non-durable manufacturing and financial insurance contributed the most,with a slight decrease in the personal savings rate.

Compared with Q1,the main reasons for the accelerated growth of real GDP in Q2 were the improvement in inventory investment and the accelerated growth of consumer spending,but housing investment declined.

From an industry perspective,the added value of the private goods sector increased by 6.9%,the private service sector increased by 2.4%,and the government increased by 0.8%.A total of 16 industries contributed to the growth of real GDP in Q2 in the United States,with non-durable manufacturing,finance and insurance,and the medical sector leading the way.

In terms of resident income,real disposable personal income (DPI) in Q2 increased by 2.4%,up 1.4 percentage points from the previous estimate.The personal savings rate (the proportion of personal savings to DPI) was 5.2%,down from 5.4% in Q1.

In terms of corporate profits,the annualized QoQ final value of corporate profits in Q2 was 3.6%,down 1.7% in Q1.Financial companies were the main force,with profits increasing by 7% in Q2,and profits of non-financial companies increased by 4.2%.Compared with a year ago,corporate profits increased by 10.8% in Q2.

The economic growth rate for 2023 has been revised upward,but only for the first half of the year.In the annual comprehensive report released this time,there are two eye-catching points about GDP - the upward revision of GDP in the second quarter of 2022 and the moderate slowdown in growth in the second half of last year.

Although the GDP growth rate last year was revised up from 2.5% to 2.9%,the growth rate in the third quarter was revised down by 0.5 percentage points to 4.4%,and the growth rate in the fourth quarter was revised down by 0.2 percentage points to 3.2%,indicating a slight weakening of momentum entering 2024.

For 2022,the GDP growth rate in the second quarter was revised up from a decrease of 0.6% to an increase of 0.3%.Previously,the data showed that GDP had been declining for several consecutive quarters,which is in line with the traditional definition of an economic recession.However,in the United States,this is not considered official data unless the economists of the National Bureau of Economic Research determine an economic recession.