GDP: Better Than Expectedby Tim Manni
The Gross Domestic Product (GDP) was revised upward from 1.9% to 3.3% on an annual basis for the second quarter of 2008, exceeding expectations of 2.7% increase:
- The upward revision to overall GDP growth reflected stronger consumption (its contribution was revised to 1.2 percentage points from 1.1 percentage points), higher exports and a better trade balance (contribution revised to 3.1 percentage points from 2.4 percentage points), less inventory liquidation (contribution revised to -1.4 percentage points from -1.9 percentage points), and government spending (contribution revised to 0.8 of a percentage point from 0.7 of a percentage point).
- Demand was supported by the stimulus checks that began to be disbursed at the end of April and foreign growth. Consumption and net exports added 1.2 and 3.1 percentage points to annualized real GDP growth last quarter, up from 0.8 and 0.6 of a percentage point, respectively, in the first quarter. Last quarter’s addition from net exports was the largest since 1980.