Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Third Estimate 2Q2014 GDP Revised up to 4.6% Growth

admin by admin
September 26, 2014
in Uncategorized
0
0
SHARES
9
VIEWS
Share on FacebookShare on Twitter

Written by Doug Short and Steven Hansen

The third estimate of second quarter 2014 Real Gross Domestic Product (GDP) is now a positive 4.6%.

  • The market expected GDP at 4.3 to 5.0% (consensus 4.6%).
  • This data point was +4.0% in the advance GDP estimate, and 4.2% in the second estimate.

Headline GDP is calculated by annualizing one quarter’s data against the previous quarters data (and the previous quarter was terrible in this instance). A better method would be to look at growth compared to the same quarter one year ago. For 2Q2014, the year-over-year growth is 2.6% – up from 1Q2014’s 1.9% year-over-year growth. So one might say that GDP growth accelerated 0.7% from the first quarter.

If one wants to pick the main reasons for the improvement of GDP between the second and third estimate – it was increased fixed investment and improved trade balance.

This third estimate released today is based on more complete source data than were available for the “second” estimate issued last month. (See caveats below.)

Real GDP is inflation adjusted and annualized – the economy improved on a cumulative and on a per capita basis.

Real GDP per Capita

The table below compares the 1Q2014 third estimate of GDP (Table 1.1.2) with the advance, second and third estimate 2Q2014 GDP which shows:

  • consumption for goods and services has improved;
  • trade balance again worsened (but improved between the advance, 2nd and 3rd estimate);
  • there was an inventory growth adding over 1.4% to GDP;
  • fixed investment improved;
  • government spending actually added to GDP.

The arrows in the table below show the improvement (green arrows) or decline (red arrows) between the second and third estimate.

[click on graphic below to enlarge]

What the BEA says about the third estimate of 1Q2014 GDP:

In the second estimate, the increase in real GDP was 4.2 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in exports were larger than previously estimated.

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

Inflation continues to moderate as the “deflator” which adjusts the current value GDP to a “real” comparable value continues to moderate. The market expected the compounded annual rate of change of the implicit price deflator at 2.1% to 2.2% (consensus 2.1%) versus the reported 2.1%. The following compares the GDP implicit price deflator year-over-year growth to the Consumer Price Index [this puts both on the same basis for comparision]:

What the BLS says about the revision from the second to the third estimate:

The upward revision to the percent change in real GDP primarily reflected upward revisions to nonresidential fixed investment and to exports.

In the same release, corporate profits data was released showing expansion in 2Q2014. There was an upward revision of profits from $154.9 (second estimate) to $164.1 billion (third estimate):

Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $164.1 billion in the second quarter, in contrast to a decrease of $201.7 billion in the first.

Profits of domestic financial corporations increased $33.3 billion in the second quarter, in contrast to a decrease of $86.2 billion in the first. Profits of domestic nonfinancial corporations increased $134.3 billion, in contrast to a decrease of $89.6 billion. The rest-of-the-world component of profits decreased $3.6 billion in the second quarter, compared with a decrease of $26.0 billion in the first. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world. In the second quarter, receipts increased $2.7 billion and payments increased $6.3 billion.

Taxes on corporate income increased $45.7 billion in the second quarter, compared with an increase of $66.9 billion in the first. Profits after tax with IVA and CCAdj increased $118.4 billion, in contrast to a decrease of $268.6 billion. Dividends decreased $0.5 billion in the second quarter, compared with a decrease of $89.5 billion in the first. Undistributed profits increased $118.8 billion, in contrast to a decrease of $178.9 billion. Net cash flow with IVA — the internal funds available to corporations for investment — increased $133.4 billion, in contrast to a decrease of $163.0 billion.

Overview Analysis:

Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER).

Here is a close-up of GDP alone with a line to illustrate the 3.3 average (arithmetic mean) for the quarterly series since the 1947. I’ve also plotted the 10-year moving average, currently at 1.6 percent, down from 1.7 percent last quarter.

Here is the same chart with a linear regression that illustrates the gradual decline in GDP over this timeframe.

A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change.

Click to View

And for a bit of political trivia, here is a look at GDP by party in control of the White House and Congress.

In summary, the Q2 GDP Third Estimate of 4.6 percent matched the forecast of most mainstream economists and reinforces the opinion that the Q1 GDP contraction was a weather-related fluke.

The chart below is a way to visualize real GDP change since 2007. The chart uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. As the analysis clear shows, personal consumption is key factor in GDP mathematics.

Click to View

Caveats on the Use of Gross Domestic Product (GDP)

GDP is market value of all final goods and services produced within the USA where money is used in the transaction – and it is expressed as an annualized number. GDP = private consumption + gross investment + government spending + (exports − imports), or GDP = C + I + G + (X – M). GDP counts monetary expenditures. It is designed to count value added so that goods are not counted over and over as they move through the manufacture – wholesale – retail chain.

The vernacular relating to the different GDP releases:

“Advance” estimates, based on source data that are incomplete or subject to further revision by the source agency, are released near the end of the first month after the end of the quarter; as more detailed and more comprehensive data become available, “second” and “third” estimates are released near the end of the second and third months, respectively. The “latest” estimates reflect the results of both annual and comprehensive revisions.

Consider that GDP includes the costs of suing your neighbor or McDonald’s for hot coffee spilled in your crotch, plastic surgery or cancer treatment, buying a new aircraft carrier for the military, or even the replacement of your house if it burns down – yet little of these activities is real economic growth.

GDP does not include include home costs (other than the new home purchase price even though mortgaged up the kazoo), interest rates, bank charges, or the money spent buying anything used.

It does not measure wealth, disposable income, or employment.

In short, GDP does not measure the change of the economic environment for Joe Sixpack in 1970, and Joe Sixpack’s kid, yet pundits continuously compare GDP across time periods.

Although there always will be some correlation between all economic pulse points, GDP does not measure the economic elements that directly impact the quality of life of its citizens.

Related Articles

Old Analysis Blog

New Analysis Blog

Posts on GDPPosts on GDP

 

Previous Post

What We Read Today 26 September 2014

Next Post

Market Commentary: Markets Remain Elevated, But For How Long

Related Posts

Hong Kong To Begin Regulating Crypto In June 2023, 80 Firms Ready To Join
Economics

Hong Kong To Begin Regulating Crypto In June 2023, 80 Firms Ready To Join

by John Wanguba
March 20, 2023
JPMorgan And Other Top U.S. Banks Swamped With New Clients Post SVB Collapse – FT
Business

JPMorgan And Other Top U.S. Banks Swamped With New Clients Post SVB Collapse – FT

by John Wanguba
March 20, 2023
Top Five U.S. Regional Lenders With Most Uninsured Deposits
Business

Top Five U.S. Regional Lenders With Most Uninsured Deposits

by John Wanguba
March 20, 2023
Bitcoin Reaches New Highs, Records Double-Digit Gain As Banking Crisis Fears Increase
Economics

Bitcoin Reaches New Highs, Records Double-Digit Gain As Banking Crisis Fears Increase

by John Wanguba
March 20, 2023
Bitcoin Reaches 9-Month Highs Amid Industry Headwinds
Economics

Bitcoin Reaches 9-Month Highs Amid Industry Headwinds

by John Wanguba
March 18, 2023
Next Post

Market Commentary: Markets Remain Elevated, But For How Long

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market Bitcoin mining blockchain BTC business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe finance FTX inflation investment market analysis Metaverse mining NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Hong Kong To Begin Regulating Crypto In June 2023, 80 Firms Ready To Join
  • JPMorgan And Other Top U.S. Banks Swamped With New Clients Post SVB Collapse – FT
  • Top Five U.S. Regional Lenders With Most Uninsured Deposits

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish