GDP

In its second estimate of Q2 GDP, the government reported that the economy expanded at a 1.6% annualized pace, much slower than the original estimate of 2.4% while slightly above consensus estimates of 1.4%.  Consumer spending rose at a 2.0% annualized pace for the quarter, an increase from the original estimate of 1.6%.  Business spending expanded at a fast pace, rising 17.6% in Q2 as businesses replenished equipment that did not replace during the recession.  A widening trade imbalance subtracted 4.45 points from growth as imports grew 32.4%, marking the biggest jump since 1984.  The core personal consumption expenditures gauge increased at an annualized rate of 1.1%, matching Q1's rate.

Summary:  Second quarter GDP was even weaker than originally anticipated as imports surged, subtracting from growth. 

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