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 1.6 percent in the second quarter of 2010 (that is, from the first quarter to the second quarter), according to the "second" estimate released August 27 by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.
The GDP estimates released August 27 are based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.4 percent.
The increase in real GDP in the second quarter primarily reflected positive contributions from non-residential fixed investment, personal consumption expenditures, exports, federal government spending, private inventory investment, 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 a sharp acceleration in imports and a sharp deceleration in private inventory investment that were partly offset by an upturn in residential fixed investment, an acceleration in non-residential fixed investment, an upturn in state and local government spending, and an acceleration in federal government spending.
Final sales of computers added 0.03 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 0.08 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, the same increase as in the advance estimate; this index increased 2.1 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 1.6 percent in the first.
Real personal consumption expenditures increased 2.0 percent in the second quarter, compared with an increase of 1.9 percent in the first. Real non-residential fixed investment increased 17.6 percent, compared with an increase of 7.8 percent. Non-residential structures increased 0.4 percent, in contrast to a decrease of 17.8 percent. Equipment and software increased 24.9 percent, compared with an increase of 20.4 percent. Real residential fixed investment increased 27.2 percent, in contrast to a decrease of 12.3 percent.
Real exports of goods and services increased 9.1 percent in the second quarter, compared with an increase of 11.4 percent in the first. Real imports of goods and services increased 32.4 percent, compared with an increase of 11.2 percent.
Real federal government consumption expenditures and gross investment increased 9.1 percent in the second quarter, compared with an increase of 1.8 percent in the first. National defense increased 7.3 percent, compared with an increase of 0.4 percent. Non-defense increased 12.9 percent, compared with an increase of 5.0 percent. Real state and local government consumption expenditures and gross investment increased 1.2 percent, in contrast to a decrease of 3.8 percent.
The change in real private inventories added 0.63 percentage point to the second-quarter change in real GDP, after adding 2.64 percentage points to the first-quarter change. Private businesses increased inventories $63.2 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 1.0 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 4.9 percent in the second quarter, compared with an increase of 3.9 percent in the first.
Gross national product
Real gross national product – the goods and services produced by the labor and property supplied by U.S. residents – increased 1.7 percent in the second quarter, compared with an increase of 4.4 percent in the first. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $2.1 billion in the second quarter after increasing $22.9 billion in the first; in the second quarter, receipts increased $13.7 billion, and payments increased $11.6 billion.
Current-dollar GDP
Current-dollar GDP – the market value of the nation's output of goods and services – increased 3.6 percent, or $128.6 billion, in the second quarter to a level of $14,575.0 billion. In the first quarter, current-dollar GDP increased 4.8 percent, or $169.1 billion.
Revisions
The “second” estimate of the second-quarter increase in real GDP is 0.8 percentage point, or $25.0 billion, lower than the advance estimate issued last month, primarily reflecting an upward revision to imports and downward revisions to private inventory investment and to exports that were partly offset by an upward revision to personal consumption expenditures.
Corporate profits
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $72.7 billion in the second quarter, compared with an increase of $148.4 billion in the first quarter. Current-production cash flow (net cash flow with inventory valuation adjustment) – the internal funds available to corporations for investment – increased $53.7 billion in the second quarter, compared with an increase of $33.3 billion in the first.
Taxes on corporate income increased $39.0 billion in the second quarter, compared with an increase of $84.1 billion in the first. Profits after tax with inventory valuation and capital consumption adjustments increased $33.8 billion in the second quarter, compared with an increase of $64.1 billion in the first. Dividends increased $4.5 billion compared with an increase of $11.8 billion; current-production undistributed profits increased $29.2 billion, compared with an increase of $52.4 billion.
Domestic profits of financial corporations decreased $0.4 billion in the second quarter, in contrast to an increase of $5.2 billion in the first. Domestic profits of nonfinancial corporations increased $67.9 billion in the second quarter, compared with an increase of $117.2 billion in the first. In the second quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real value added increased. The increase in unit profits reflected an increase in unit prices and decreases in both the unit labor and non-labor costs corporations incurred.
The rest-of-the-world component of profits increased $5.3 billion in the second quarter, compared with an increase of $25.9 billion in the first. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus dividends paid by U.S. corporations to unaffiliated foreign residents. The second-quarter increase was accounted for by a larger increase in receipts than in payments.
Profits before tax increased $41.0 billion in the second quarter, compared with an increase of $224.5 billion in the first. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments. These adjustments convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to the current-cost measures used in the national income and product accounts. The capital consumption adjustment decreased $1.2 billion in the second quarter (from -$169.9 billion to -$171.1 billion), compared with a decrease of $106.9 billion in the first. The inventory valuation adjustment increased $32.9 billion (from -$36.4 billion to -$3.5 billion), compared with an increase of $30.8 billion.
