2017 Economic Calendar
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Released On 7/28/2017 8:30:00 AM For Q2(a):2017
PriorPrior RevisedConsensusConsensus RangeActual
Real GDP - Q/Q change - SAAR1.4 %1.2 %2.6 %2.2 % to 3.2 %2.6 %
GDP price index - Q/Q change - SAAR1.9 %2.0 %1.2 %1.0 % to 1.8 %1.0 %
Real Consumer Spending - Q/Q change - SAAR1.1 %1.9 %2.8 %2.2 % to 2.9 %2.8 %

The second quarter was healthy, growing at an as-expected 2.6 percent annualized rate with the consumer spending component also healthy and as expected, at a 2.8 percent rate. Business investment, at 5.2 percent, was once again very strong and offset a bounce lower for residential investment which fell at a 6.8 percent rate. Inventories were slightly negative for the quarter while net exports improved and proved a slight positive. Government purchases added slightly to the quarter. Inflation was very weak, at only a 1.0 percent rate. The core is similar, at 1.1 percent and down from 2.4 percent in the first quarter.

Turning back to consumer spending, durables were very strong at 6.3 percent despite the quarter's weakness in vehicle sales. Nondurables rose 3.8 percent which is also strong and coming despite weakness in gasoline prices. Pulling down the consumer component was service spending, up a moderate 1.9 percent.

Benchmark revisions are included in the report, having little overall effect over the last 3 years but pulling down full-year 2016 slightly, by 1 tenth to 1.5 percent, and also the first-quarter by 2 tenths to 1.2 percent. There are no surprises in this report, one consistent with solid growth but also underscoring this year's unexpected trouble for inflation.

Consensus Outlook
The first estimate for second-quarter GDP is expected to come in at a solid annualized rate of 2.6 percent, nearly doubling the first quarter's 1.4 percent showing. Retail sales have been flat yet consumer spending is expected to lead the quarter with a 2.8 percent gain, up from 1.1 percent. Inventories are also expected to add to growth along with business investment. Residential investment, however, is not expected to add to the quarter. Inflation data have been very soft and only a 1.2 percent gain is expected for the GDP price index, down from an already soft 1.9 percent in the first quarter.

Gross Domestic Product represents the total value of the country's production during the period and consists of the purchases of domestically-produced goods and services by individuals, businesses, foreigners and government entities. Data are available in nominal and real (inflation-adjusted) dollars, as well as in index form. Economists and market players always monitor the real growth rates generated by the GDP quantity index or the real dollar value. The quantity index measures inflation-adjusted activity, but we are more accustomed to looking at dollar values.

Household purchases are counted in personal consumption expenditures -- durable goods (such as furniture and cars), nondurable goods (such as clothing and food) and services (such as banking, education and transportation). Private housing purchases are classified as residential investment. Businesses invest in nonresidential structures, durable equipment and computer software. Inventories at all stages of production are counted as investment. Only inventory changes, not levels, are added to GDP.

Net exports equal the sum of exports less imports. Exports are the purchases by foreigners of goods and services produced in the United States. Imports represent domestic purchases of foreign-produced goods and services and must be deducted from the calculation of GDP. Government purchases of goods and services are the compensation of government employees and purchases from businesses and abroad. Data show the portion attributed to consumption and investment. Government outlays for transfer payments or interest payments are not included in GDP.

The GDP price index is a comprehensive indicator of inflation. It is typically lower than the consumer price index because investment goods (which are in the GDP price index but not the CPI) tend to have lower rates of inflation than consumer goods and services. Note that contributions of each component, as averaged over the prior year, are tracked in the table below (components do not exactly sum to total due to chain-weighted methodology). Consumption expenditures, otherwise known as consumer spending, has over history been steadily making up an increasing share of GDP.  Why Investors Care
Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.
Data Source: Haver Analytics
It is common to compare quarterly change at annualized rates in the GDP deflator. But these changes can be volatile and mask the trend which, just like the quarterly swings in GDP, is sometimes more visible in year- on-year change.
Data Source: Haver Analytics

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