The U.S. gross domestic product increased 1.2 percent in the second quarter of 2016, according to the “advance” estimate from the Department of Commerce, following a revised increase of just 0.8 percent in the first quarter.
The United States economy continued its sluggish growth in the second quarter of 2016, according to an “advance” estimate issued today by the U.S. Commerce Department.
U.S. gross domestic product (GDP) – the broadest measure of a nation’s overall economic health – increased 1.2 percent during Q2 2016, up from a revised 0.8 percent advance in the first quarter. GDP is a calculation of the value of the goods and services produced by a nation’s economy minus the value of the goods and services used up in production.
Previous Commerce estimates pegged first quarter GDP growth at 1.1 percent, which still would have been lower than the 1.4 percent growth rate seen in fourth quarter 2015. The department’s initial estimate of just 0.5 percent GDP growth, released in April, would have been the slowest pace in two years.
The department’s Bureau of Economic Analysis (BEA) said the 0.3-percentage point downward revision to the percent change in first quarter GDP growth was driven primarily by downward revisions to residential fixed investment, private inventory investment, and exports that were partly offset by upward revisions to nonresidential fixed investment, personal consumption expenditures, state and local government spending, federal government spending, and imports, which are a subtraction in the calculation of GDP.
Real exports of goods and services grew 1.4 percent in the second quarter, while imports slipped 0.4 percent, according to BEA. U.S. export growth has been held in check by a strong dollar, which makes U.S. exports more expensive and, therefore, less desirable abroad, as well as declining demand in China and Europe.
For the full year in 2015, U.S. GDP increased 2.4 percent – the same rate as in 2014.
Meanwhile, additional new data from Commerce regarding the U.S. manufacturing sector seemed to confirm slowing economic growth.
New orders for durable goods in June fell 4 percent, or $9.3 billion, to $219.8 billion, according to an advance estimate from the U.S. Census Bureau. The decline follows a revised decrease of 2.8 percent in May, and increases of 3.3 percent and 1.9 percent in April and March, respectively.
The monthly increases in April and March, however, were preceded by decreases in three of the previous four months. January durable goods orders showed 4.3 percent growth, but came on the heels of a 4.6 percent decrease in December 2015 and a 0.5 percent decline in November. Orders in February fell another 3.1 percent.
Transportation equipment again led the June decrease, down 10.5 percent, or $8.5 billion, to $72.2 billion, its second decline in as many months.
U.S. economy continues sluggish growth in Q2
