Second Quarter 2017 Advance Estimate GDP

America’s gross domestic product (GDP) grew 2.6 percent on an annualized basis during the second quarter of 2017 according to the first of at least three estimates from the Bureau of Economic Analysis. This represents an acceleration compared to the economy’s pace in the first three months of this year when output grew by just 1.2 percent (downwardly revised from 1.4 percent). Gains were widespread within the report.

All four major categories improved in the period. Personal income expenditures accelerated to a pace of 2.8 percent on an annualized basis, up from 1.9 percent; spending on goods led the overall economy in the period, adding more to the headline total than any other segment. Capital investments by businesses increased 2.0 percent after declining in the prior period as firms spent an annualized 8.2 percent more on the subcategory of equipment. Even international trade helped moved the rate of change needle higher as exports grew faster than imports. Finally, government expenditures added to the total because the Federal Government increased spending by 2.3 percent, even as state and local outlays fell 0.2 percent.

There are no signs of an imminent recession in this indicator currently. Shaking off some weakness witnessed in the prior six months, America’s output growth accelerated in the second quarter of this year after two consecutive periods of deceleration. Additionally, forward looking indicators suggest more of the same in the near future. For instance, new orders from the Institute for Supply Management remain promising (more on these in the days ahead), and the Conference Board’s Leading Economic Index is still trending upward. While a substantial acceleration does not appear to be in the cards at this time, the next economic contraction isn't on the immediate horizon either.