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Economic Update: GDP Revised Higher to +4.2% for Q2


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Economic Update: U.S. GDP

The government’s first revision to the nation’s GDP for the second quarter of 2014 showed that growth was stronger than expected.

The report stated that the economy’s growth rate was +4.2% during the April through June period. Recall that the initial report had shown a growth rate of +4.0%, which was significantly higher than the +2.8% level that had been expected.

The growth rate was above Wall Street expectations for a rate of +4.0%, and also well above last quarter’s pace of -2.1%.

Prior readings for reference purposes:

  • Q1 2014: -2.1%
  • Q4: +2.6%
  • Q3: +4.1%
  • Q2: +2.5%
  • Q1 2013: +1.8%
  • Q4: +0.1%
  • Q3: +3.1%
  • Q2: +1.3%
  • Q1 2012: +2.0%
  • Q4 : +3.0%
  • Q3: +1.8%
  • Q2: +1.3%
  • Q1 2011: +0.4%
  • Q4: +3.1%
  • Q3 +2.6%
  • Q2: +1.7%
  • Q1 2010: +3.7%.


Note that the country’s GDP has now increased in 19 of the past 20 quarters.

On the inflation front, the Deflator came in at +2.1%, which was above the estimates for a reading of +2.0% and above Q1’s final reading of +1.3% (Q4: +1.6%, Q3: +2.0%).

Finally, Personal Consumption was unchanged from the initial report, sporting a gain of +2.5% on an annual basis. This was above the last read of +1.0% (Q4 2013: +3.3%).

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About the Author

David Moenning is the Chief Investment Officer at Sowell Management Services. Dave began his investment career in 1980 and has been an independent money manager since 1987. Thus, Dave has been live on the firing line and investing for a living for more than 29 years.