Real GDP rose at an annual rate of 2.8 percent in the second quarter of 2024, according to an “advance” estimate released by the US Bureau of Economic Analysis. In the first quarter, real GDP increased by 1.4 percent.
GDP estimate released today based on incomplete source data or subject to further review by source agency Second quarter estimate, based on more complete source data, will be released on August 29, 2024.
The increase in real GDP primarily reflects increases in consumer spending, private inventory investment, and non-residential fixed investment. Imports, which are subtracted in the calculation of GDP, have increased
The increase in consumer spending reflects increases in both services and goods. Within services, the main contributions were healthcare, housing, utilities and leisure services. In commodities, motor vehicles and their parts, recreational goods and vehicles, furnishings and non-durable household equipment, gasoline and other energy commodities were the main contributors. The increase in private inventory investment primarily reflected increases in wholesale and retail trade industries partially offset by declines in the mining, utilities and construction industries. In non-residential fixed investment, increases in equipment and IP products were partially offset by a decrease in structures. Imports were led by capital goods, excluding automobiles.
Compared to the first quarter, the acceleration of real GDP in the second quarter primarily reflected a rise in private inventory investment and an acceleration in consumer spending. These moves were partially offset by a decline in residential fixed investment.
Current dollar GDP increased 5.2 percent at an annual rate, or $360.0 billion, in the second quarter to $28.63 trillion. In the first quarter, GDP increased by 4.5 percent, or $312.2 billion.
How to calculate quarterly GDP and impacts
To obtain quarterly GDP, official economic data issued by the government or concerned economic institutions can be used. Follow the following steps to calculate quarterly GDP:
Data collection: Find official economic data containing GDP statistics for the country in question.
Select a time period: Make sure that the time period selection includes the quarter for which you want to calculate GDP.
Calculate GDP: Sum the production values of all goods and services in the economy during the respective time period. These values can include private consumption, investments, exports, and imports.
Correcting values for policy changes: Be sure to correct data for any political or economic changes that may affect the accuracy of GDP.
Calculation of economic growth: After calculating the GDP for the quarter, compare it with the previous quarter or the same period of the previous year to calculate the rate of economic growth. A high growth rate is generally seen as positive for the economy and can influence investment decisions.
Federal Reserve Response Changes in advanced GDP in US dollars on a quarterly basis can affect expectations regarding the Fed’s monetary policy decisions. Strong GDP growth could lead to speculation about the possibility of a rate hike by the Fed to prevent overheating and control inflation. Higher interest rates can affect stock prices, especially in interest-sensitive sectors such as real estate and utilities.
The necessary economic data can be found from sources such as central statistical services, global economic data banks, and the websites of the ministries concerned with the economy in the country concerned.
Factors influencing investors’ analysis of GDP data
When investors analyze advanced GDP data in US dollars on a quarterly basis (GDP), they consider a range of factors to assess the health of the economy and make informed investment decisions. Here are some of the key factors that investors usually consider when analyzing this important economic indicator:
Growth rate:
Investors are closely examining the actual growth rate reported in quarterly GDP data presented in US dollars. They compare this figure with previous quarters and market expectations. A high growth rate is generally seen as positive for the economy and can influence investment decisions.
Trend Analysis:
Investors assess the trend in GDP growth over time. Sustained growth over several quarters indicates a healthy and expanding economy, while volatility or downward trend may raise concerns about economic stability and affect investment strategies.
Components of GDP:
Investors look at details of GDP components, such as consumer spending, business investment, government spending, and net exports. Understanding the sectors that drive economic growth provides insight into the underlying factors that influence GDP performance.
Effects of inflation:
Strong GDP growth could lead to increased consumer spending and investment, which could lead to higher inflation. Investors assess the inflationary effects of GDP growth because it can affect interest rates, corporate profitability, and purchasing power.
Interest Rates:
Advanced GDP data in US dollars on a quarterly basis can influence expectations regarding monetary policy decisions by the Federal Reserve. Investors are analyzing GDP growth in relation to interest rate expectations, as higher growth rates may prompt the Fed to consider raising interest rates to prevent overheating.
By looking at these key factors, investors can gain a thorough understanding of the effects of advanced GDP data in US dollars on the economy, financial markets, and investment opportunities.
