After bursting higher in second quarter, when according to the first estimate of Q2 GDP, the US economy grew at an annualized 4.1% rate, a number which rose to 4.2% in the second estimate in August, moments ago the BEA reported that according to its final estimate of second quarter GDP, US growth remained unchanged at a 4.2% annualized rate, or technically 4.15% - in line with consensus and still the highest since the summer of 2016 - at a time when the Trump's $1.5 trillion fiscal stimulus was boosting the US economy.
While overall GDP growth was unrevised from the second estimate, there were small revisions in the subcomponents, reflecting upward revisions in most categories, which were offset by a downward revision to inventory investment.
After last month's modest drop in Personal Consumption (from 4.0% initially reported to 3.8%), in the final revision, this number remained unchanged at 3.8%, and in line with expectations.
In terms of contribution to the bottom line, the various line items were as follows:
A big contributor to growth was nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 8.7% in 2Q after rising 11.5% prior quarter
Separately, the GDP price index rose 3.0% in 2Q after rising 2.0% prior quarter, while core PCE q/q surprised modestly by rising 2.1% in 2Q after the prior report showed a 2.0% increase.
Also in today's report, the BEA said that corporate profits rose 1.2% in prior quarter; y/y corporate profits were revised somewhat lower up 7.3% in 2Q after rising 5.9% prior quarter, and were broken down as follows:
Finally, while the number is largely irrelevant, as it references a period nearly 4 months old, it confirms that the economy was heating up headed into the summer. The bigger question of what GDP will do this quarter will be answered in one month, however according to high frequency economic indicators and the latest FOMC projections, all signs point to a continuation of the trend, especially since the impact of Trump's fiscal boost is expected to peak some time around now.