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US economic growth slowed to 1.5%

July 30, 2012

US real gross domestic product rose 1.5% in Q2 (consensus of 82 analysts in a Bloomberg poll: 1.4%) after expanding 2% in the first quarter, according to the Bureau of Economic Analysis in Washington. The Q1 growth rate was corrected up by 0.1% to 2%.

Preliminary data showed that the increase in real GDP (i.e. the output of goods and services produced by labor and property located in the US) in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE, +1.5% q-o-q, slowest in a year, consensus: +1.3%, Q1: revised to +2.4% from +2.5%; the average annual rate of increase in the “core” PCE price index which excludes food and energy was 1.8%, matching the median expert estimate), exports, non-residential fixed investment, private inventory investment, and residential fixed investment that were partly offset by a negative contribution from state and local government spending. Imports, which are a subtraction in the calculation of GDP, climbed 6% (which outweighed export growth of 5.3%).