Real gross domestic product 2qtr 04- 3% increase per BEA

[papau]

http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm
JULY 30, 2004


Virginia H. Mannering: (202) 606-5304 (GDP) BEA 04-36
Recorded message: (202) 606-5306

Brent Moulton: (202) 606-9606 (Annual Revision)
Carol Moylan: (202) 606-9715


NATIONAL INCOME AND PRODUCT ACCOUNTS
. SECOND QUARTER 2004 GDP (ADVANCE)
. REVISED ESTIMATES: 2001 THROUGH FIRST QUARTER 2004



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 3.0 percent in the second quarter of 2004,
according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real
GDP increased 4.5 percent (revised).

The Bureau emphasized that the second-quarter "advance" estimates are based on source data that
are incomplete or subject to further revision by the source agency (see the box on page 3). The second-
quarter "preliminary" estimates, based on more comprehensive data, will be released on August 27,
2004.


BOX
The estimates released today reflect revisions in the national income and product accounts
(NIPAs) beginning with the first quarter of 2001. Revisions are usually made each July to incorporate
source data that are more complete, more detailed, and otherwise more consistent than previously
available. This release includes the revised quarterly estimates of GDP, corporate profits, and personal
income and provides an overview of the effects of the revision.

The August 2004 Survey of Current Business will contain NIPA tables and an article describing
the revisions. The revised estimates will be available from BEA's Web site (see page 7).

FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent
changes are calculated from unrounded data and annualized. "Real" estimates are in chained (2000)
dollars. Price indexes are chain-type measures.

This news release is available on BEA's Web site at <www.bea.gov/bea/rels.htm>.

The major contributors to the increase in real GDP in the second quarter were exports, residential
fixed investment, equipment and software, personal consumption expenditures (PCE), government
spending, and private inventory investment. Imports, which are a subtraction in the calculation of GDP,
increased.

The deceleration in real GDP growth in the second quarter primarily reflected a sharp deceleration
in PCE and a deceleration in private inventory investment that were partly offset by accelerations in
exports and in residential fixed investment.<snip>

[tritsofme]

1. Q1 reminds us that these advance, preliminary, and even final GDP numbers

are very volatile.

The final peep out of the BEA is that GDP in Q1 hit what everyone said it would back in April when the advance numbers were released.

It wouldn't surprise me very much to see this revised to around 3.5%, but not much more than that. But even if we don't, 3-4% is the desired rate of growth to keep inflation in check.

I also think we will see a fairly strong acceleration in Q3 and Q4, probably of about 4.5-5%.

[tritsofme]

2. Did you notice Q3 2003 was revised back down to 7.4%?

And Q2 2003 up to 4.1%, wasn't the last number 3%?

I just noticed that reading through the report.