Washington – Surge in consumer spending and an upturn in exports helped the U.S. economy bounced back in April-June period after a slow start in the first quarter, according to the first estimates released by the Commerce Department.
The real gross domestic product, the value of production of goods and services, rose at annual rate of 2.3 percent in the second quarter compared with a revised 0.6 growth in Jan-March period. The “second” estimate for the second quarter will be released on Aug 27.
The Commerce Department also downward revised the real GDP growth for 2011-2014 to an average annual rate of 2.0 percent, from a previous 2.3 percent.
The modest growth in second quarter was propelled by increase in consumer spending on both durable goods, notably motor vehicles and parts, and nondurable goods. Spending on services, mainly household services also increased.
At an annual rate, consumer spending that accounts for more than two-thirds of the overall economic output rose by 2.9 percent, compared with 1.8 percent growth in the first quarter.
Exports, state and local government spending, and residential fixed investment also contributed to the rise in real GDP. These contributions to the increase in real GDP were partly offset by decreases in federal government spending, inventory investment, and business investment. In addition, imports—a subtraction in the calculation of GDP—increased.
The price index for gross domestic purchase, which measures prices paid by U.S. residents, increased 1.4 percent in the second quarter after decreasing 1.6 percent in the first quarter.
Energy prices rose in the second quarter after falling in the first quarter. Food prices declined more than in the first quarter. Excluding food and energy prices, gross domestic purchases prices increased 1.1 percent in the second quarter compared with 0.2 percent increase in the preceding quarter.
Real exports of goods and services recovered in the second quarter after a substantial decline at the start of the year. Exports in second quarter grew by 5.3 percent compared with 5.9 percent decline in the Jan-March period. Exports of goods posted the highest growth with 6.8 percent. Import grew by 3.5 percent in the second quarter versus 7.1 percent in the first quarter.
Overall private domestic investment rose by 0.3 percent. Real residential fixed investment grew by 6.6 percent as against decline in equipment, non-residential and structure.
Real federal government consumption and gross investment decreased 1.1 percent in the second quarter, in contrast to an increase of 1.1 percent in the first.