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Q2 GDP Third Estimate at 3.9%, An Upward Adjustment from 3.7%

September 25, 2015

by Jill Mislinski

The Third Estimate for Q2 GDP, to one decimal, came in at 3.9 percent, an increase from the 3.7 percent Second Estimate. Today's number was slightly better than most mainstream estimates, with and both expecting no change.

Here is an excerpt from the Bureau of Economic Analysis news release:

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 3.9 percent in the second quarter of 2015, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.7 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same; personal consumption expenditures (PCE) and nonresidential fixed investment increased more than previously estimated (see “Revisions” on page 2).

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

Real GDP increased 3.9 percent in the second quarter, after increasing 0.6 percent in the first. The acceleration in real GDP in the second quarter reflected an upturn in exports, an acceleration in PCE, a deceleration in imports, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in private inventory investment and in federal government spending. [Full Release]

Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was calculated annually. To be more precise, the chart shows is the annualized percent change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.25% average (arithmetic mean) and the 10-year moving average, currently at 1.46 percent.

Quarterly GDP since 1947

Note: The headline 3.9% GDP is 3.92% at two decimal places.

Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 14.4% below trend, the largest negative spread in the history of this series.

with a Regression

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

Real GDP Year-over-Year

In summary, the Q3 GDP Second Estimate of 3.9 percent was slightly above mainstream estimates and an improvement over the 3.7 percent Second Estimate, which was a big jump above the 2.3 percent Advanced Estimate.

Other GDP updates:

Real GDP Per Capita

Visualizing GDP