Last week’s third and final estimate of the second-quarter real growth rate rose fairly dramatically, from 3.3% to 3.8%, confirming that the economy is in good-to-great condition. Most notably, I’d say, the consumer is still shopping, big-time, as was revised up from 1.6% to 2.5%.
Here are some of the major winning (and some losing) components of 2Q GDP, thanks to Ed Yardeni.
Fixed investments in intellectual property (IP) were up the most (+15%) while imports were down the most (-29%), partly due to the imposition of higher (but temporary) tariffs on some trading partners.
Moving ahead to the current (third quarter), ending last Tuesday, the Atlanta Fed’s model, , estimates a continuation of the second-quarter’s torrid pace, at +3.9%, up from a 3.3% estimate earlier last week.
Looking at the leading component from the Atlanta Fed, we see fixed business equipment rising the most (nearly 12%), while fixed residential and business structures were the main drag, down 5% to 6%.
This sudden upward revision in real GDP growth in two consecutive quarters – combined with the recent downward revisions in – implies that productivity growth is fueling this surge. The cut rates due to a weakness in the labor market rather than high growth or high , but this latest wave of decline in new jobs seems to stem mostly from productivity growth, replacing humans with bots.
Happy New Fiscal Year: US Growth Accelerates on Productivity Gains
