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U.S. GDP pace slows in Q2

Private businesses increase inventories $75.7 billion in quarter.


Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.4 percent in the second quarter of 2010, (from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.

In the first quarter, real GDP increased 3.7 percent.

The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures, private inventory investment, federal government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

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

Final sales of computers added 0.04 percentage point to the second-quarter change in real GDP after adding 0.10 percentage point to the first-quarter change. Motor vehicle output subtracted 0.01 percentage point from the second-quarter change in real GDP after adding 0.74 percentage point to the first-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.1 percent in the second quarter, compared with an increase of 2.1 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 0.9 percent in the second quarter, compared with an increase of 1.6 percent in the first.

Real personal consumption expenditures increased 1.6 percent in the second quarter, compared with an increase of 1.9 percent in the first.

Durable goods increased 7.5 percent, compared with an increase of 8.8 percent.

Nondurable goods increased 1.6 percent, compared with an increase of 4.2 percent.

Services increased 0.8 percent, compared with an increase of 0.1 percent.

Real nonresidential fixed investment increased 17.0 percent in the second quarter, compared with an increase of 7.8 percent in the first.

Nonresidential structures increased 5.2 percent, in contrast to a decrease of 17.8 percent.

Equipment and software increased 21.9 percent, compared with an increase of 20.4 percent.

Real residential fixed investment increased 27.9 percent, in contrast to a decrease of 12.3
percent.

Real exports of goods and services increased 10.3 percent in the second quarter, compared with an increase of 11.4 percent in the first. Real imports of goods and services increased 28.8 percent, compared with an increase of 11.2 percent.

Real federal government consumption expenditures and gross investment increased 9.2 percent in the second quarter, compared with an increase of 1.8 percent in the first.

National defense increased 7.4 percent, compared with an increase of 0.4 percent.

Nondefense increased 13.0 percent, compared with an increase of 5.0 percent.

Real state and local government consumption expenditures and gross investment increased 1.3 percent, in contrast to a decrease of 3.8 percent.

The change in real private inventories added 1.05 percentage points to the second-quarter change in real GDP after adding 2.64 percentage points to the first-quarter change.

Private businesses increased inventories $75.7 billion in the second quarter, following an increase of $44.1 billion in the first quarter and a decrease of $36.7 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 1.3 percent in the second quarter, compared with an increase of 1.1 percent in the first.

Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 5.1 percent in the second quarter, compared with an increase of 3.9 percent in the first.

Disposition of personal income

Current-dollar personal income increased $123.9 billion (4.1 percent) in the second quarter, compared with an increase of $122.8 billion (4.1 percent) in the first.

Personal current taxes increased $1.3 billion in the second quarter, compared with an increase of $19.6 billion in the first.

Disposable personal income increased $122.6 billion (4.4 percent) in the second quarter, compared with an increase of $103.3 billion (3.8 percent) in the first. Real disposable personal income increased 4.4 percent, compared with an increase of 1.7 percent.

Personal outlays increased $36.6 billion (1.4 percent) in the second quarter, compared with an increase of $98.2 billion (3.8 percent) in the first. Personal saving -- disposable personal income less personal outlays -- was $707.1 billion in the second quarter, compared with $621.1 billion in the first.

The personal saving rate -- saving as a percentage of disposable personal income -- was 6.2 percent in the second quarter, compared with 5.5 percent in the first.

For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s flow of funds accounts and data on changes in net worth, go to http://www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 4.3 percent, or $151.3 billion, in the second quarter to a level of $14,597.7 billion. In the first quarter, current-dollar GDP increased 4.8 percent, or $169.1 billion.

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