U.S. GDP Increased at an Annual Rate of 2.3% in Q2

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Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 2.3 percent in the second quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 0.6 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 10).  The "second" estimate for the second quarter, based on more complete data, will be released on August 27, 2015.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, state and local government spending, and residential fixed investment that were partly offset by negative contributions from federal government spending, private inventory investment, and nonresidential fixed investment.  Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the second quarter reflected an upturn in exports, an acceleration in PCE, a deceleration in imports, and an upturn in state and local government spending that were partly offset by downturns in private inventory investment, in nonresidential fixed investment, and in federal government spending and a deceleration in residential fixed investment.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.4 percent in the second quarter, in contrast to a decrease of 1.6 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 1.1 percent, compared with an increase of 0.2 percent.

Real personal consumption expenditures increased 2.9 percent in the second quarter, compared with an increase of 1.8 percent in the first.  Durable goods increased 7.3 percent, compared with an increase of 2.0 percent.  Nondurable goods increased 3.6 percent, compared with an increase of 0.7 percent.  Services increased 2.1 percent, the same increase as in the first quarter.

Real nonresidential fixed investment decreased 0.6 percent in the second quarter, in contrast to an increase of 1.6 percent in the first.  Investment in nonresidential structures decreased 1.6 percent, compared with a decrease of 7.4 percent.  Investment in equipment decreased 4.1 percent, in contrast  to  an increase of 2.3 percent.  Investment in intellectual property products increased 5.5 percent, compared with an increase of 7.4 percent.  Real residential fixed investment increased 6.6 percent, compared with an increase of 10.1 percent.

Real exports of goods and services increased 5.3 percent in the second quarter, in contrast to a decrease of 6.0 percent in the first.  Real imports of goods and services increased 3.5 percent, compared with an increase of 7.1 percent.

Real federal government consumption expenditures and gross investment decreased 1.1 percent in the second quarter, in contrast to an increase of 1.1 percent in the first.  National defense decreased 1.5 percent, in contrast to an increase of 1.0 percent.  Nondefense decreased 0.5 percent, in contrast to an increase of 1.2 percent.  Real state and local government consumption expenditures and gross investment increased 2.0 percent, in contrast to a decrease of 0.8 percent.

The change in real private inventories subtracted 0.08 percentage point from the second-quarter change in real GDP after adding 0.87 percentage point to the first-quarter change.  Private businesses increased inventories $110.0 billion in the second quarter, following increases of $112.8 billion in the first quarter and $78.2 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 2.4 percent in the second quarter, in contrast to a decrease of 0.2 percent in the first.