The US economy advanced an annualized 4.1 percent on quarter in the second quarter of 2018, well above an upwardly revised 2.2 percent expansion in the previous period and in line with market expectations. It is the strongest growth rate since the third quarter of 2014 amid higher consumer spending and soybean exports while business spending slowed, the advance estimate showed.
Personal consumption expenditure (PCE) contributed 2.69 percentage points to growth (0.36 percentage points in the first quarter) and rose 4 percent (0.5 percent in the first quarter). Spending of durable goods rebounded (9.3 percent compared to -2 percent) and rose faster for nondurable goods (4.2 percent compared to 0.1 percent) and services (3.1 percent compared to 1 percent).
Fixed investment added 0.94 percentage points to growth (1.34 percentage points in the first quarter) and increased 5.4 percent (8 percent in the first quarter). Investment rose less for equipment (3.9 percent compared to 8.5 percent), intellectual property products (8.2 percent compared to 14.1 percent) and structures (13.3 percent compared to 13.9 percent) and continued to fall for residential (-1.1 percent compared to a -3.4 percent).
The contribution from private inventories was negative (-1 percent), compared to +0.27 in the first quarter.
Meanwhile, exports jumped 9.3 percent (3.6 percent in the previous quarter) and imports rose at a much slower pace (0.5 percent compared to 3 percent). As a result, the impact from trade was 1.06 percent, much better than -0.02 percent in the first quarter and the highest contribution since the last three months of 2013.
Government spending and investment added 0.37 percentage points to growth, slightly higher than 0.27 percentage points in the first quarter. It increased 2.1 percent, above 1.5 percent in the previous quarter.
GDP growth figures for the previous years were revised due to comprehensive updates of the National Income and Product Accounts (NIPAs), which are carried out about every five years. The updates incorporate newly available and more comprehensive source data, as well as improved estimation methodologies. The GDP growth for 2017 was revised slightly lower to 2.2 percent from 2.3 percent.