Statement on the Third Estimate of GDP for the Second Quarter of 2016

 

WASHINGTON, DC – Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the third estimate of GDP for the second quarter of 2016. 

 

Summary: Real GDP growth in the second quarter was revised up to 1.4 percent at an annual rate according to BEA’s third estimate.                                       

Second-quarter economic growth was revised to 1.4 percent at an annual rate in the third estimate, up 0.3 percentage point from the second estimate. Consumer spending grew strongly at 4.3 percent in the second quarter—its second-fastest quarterly growth since 2006—and, in contrast to recent quarters, net exports and business fixed investment also added to GDP growth. Some of this growth was offset by a large decline in inventory investment (one of the most volatile components of GDP), along with declines in residential investment and government spending. Overall, growth in the most stable and persistent components of output—consumption and fixed investment—was revised up to 3.2 percent. Today’s report underscores that there is more work to do, and the President will continue to take steps to strengthen economic growth and boost living standards by promoting greater competition across the economy; supporting innovation; and calling on Congress to increase investments in infrastructure and to pass the high-standards Trans-Pacific Partnership.

FIVE KEY POINTS IN TODAY'S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS (BEA)

 

1. Real Gross Domestic Product (GDP) increased 1.4 percent at an annual rate in the second quarter of 2016, according to BEA’s third estimate. Consumer spending grew 4.3 percent, well above its pace over the prior four quarters, with faster growth in both durable and nondurable goods spending. In addition, export growth was positive in the second quarter, and net exports contributed positively to GDP growth. Nonresidential fixed investment increased modestly in the second quarter, with strong growth in intellectual property products investment (see point 4 below) offset by continued weakness in both structures and equipment investment. Inventory investment—one of the most volatile components of GDP—subtracted 1.2 percentage points from GDP growth. Residential investment contracted following eight straight quarters of increases. 

 

You can view the complete statement here. 

 

Source: The White House, Office of the Press Secretary