The BEA reports Real Gross Domestic Product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019 according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1 percent.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Contributions to GDP

  • PCE: +2.85
  • Fixed Investment Non-Residential: -0.14
  • Fixed Investment Residential: -0.06
  • Change in Private Inventories: -0.86
  • Exports -0.63
  • Imports: -0.01
  • Government: +0.85


These numbers will be revised at least twice as more data comes in.

Interestingly, government spending and CIPI nearly balanced out. Retail spending held up.

Government spending up nearly a full percentage point is not a good thing but expect more of it.

These aren't recession-looking numbers but GDP is hugely backward looking.

Mike "Mish" Shedlock

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