USA: Real GDP grows at an annual rate of 2.1% in the second quarter, revised from 2.4%.

• Second quarter US GDP is revised from 2.4% to 2.1%.
• The Dollar Index extends its fall after the GDP data.

The US economy grew at an annual rate of 2.1% during the second quarter, below the previous estimate of 2.4%. “The updated estimates primarily reflect downward revisions to private inventory investment and nonresidential fixed investment, partly offset by an upward revision to state and local public spending,” the Bureau of Economic Analysis stated. In the first quarter, real GDP increased by 2.0%.

The Personal Consumption Expenditure Price Index (CPI) increased by 2.5%, which implies a downward revision of 0.1% compared to the previous estimate. Excluding food and energy prices, the PCE price index rose 3.7%, a downward revision of 0.1%.

Main data:

Real Gross Domestic Product (GDP) increased at an annual rate of 2.1% in the second quarter of 2023, according to the “second” estimate published by the Bureau of Economic Analysis. In the first quarter, real GDP increased by 2.0%.

Real GDP growth reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, and federal government spending, which were partly offset by declines in exports, residential fixed investment, and investment in private inventories. Imports, which remain in the GDP calculation, decreased.

In the second estimate, downward revisions to private inventory investment and nonresidential fixed investment were partly offset by upward revisions to state and local public spending, exports, consumer spending, public spending federal and residential investment. Imports have been revised upwards.

GDP in current dollars increased by 4.1% annualized, or $268.6 billion, in the second quarter, to a level of $26.80 trillion, a downward revision of $36.3 billion from the estimate former.

The gross domestic purchase price index increased by 1.7% in the second quarter, which represents a downward revision of 0.2% compared to the previous estimate.

The PCE price index increased by 2.5%, implying a downward revision of 0.1%. Excluding food and energy prices, the PCE price index rose 3.7%, a downward revision of 0.1%.

Market reaction

Following the release of the GDP report, the US dollar posted further broadside daily losses. It was already weak due to the ADP employment figures. As of this writing, the DXY is trading at 103.20, down 0.25%, at its lowest intraday level in a week.