The U.S. Bureau of Economic Analysis (BEA) has released its preliminary report on second-quarter gross domestic product (GDP). This report will be subject to two future revisions, but note that today’s report is considered a potential wild card because of the change in methodology for the reports going forward and going back all the way to 1929.

GDP was put as being up by 1.7% on the headline GDP. Dow Jones had an estimate of 0.9% and Bloomberg had the consensus estimate at 1.1%. The first-quarter growth in GDP was up by 1.1%. Another GDP report will be the second look on August 29.

Wednesday’s BEA report said:

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, non-residential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Growth in the second quarter reflected upturns in nonresidential fixed investment and in exports. There also was a smaller decrease in federal government spending, followed by higher spending at the state and local government levels. Additional points are as follows:

• The price index for gross domestic purchases increased 0.3% in the second quarter, compared with an increase of 1.2% in the first.
• Excluding food and energy prices, the price index for gross domestic purchases rose by 0.8% in the second quarter, compared with 1.4% in the first.
• Real personal consumption expenditures rose by 1.8% in the second quarter, versus an increase of 2.3% in the first quarter.
• Durable goods increased 6.5%, compared with an increase of 5.8% in the first quarter.
• Nondurable goods rose by 2.0%, compared with an increase of 2.7%.
• Services increased 0.9%, compared with an increase of 1.5%.
• Real federal government consumption expenditures and gross investment decreased 1.5% in the second quarter, compared with a decrease of 8.4% in the first.
• National defense spending fell by 0.5%, compared with a decrease of 11.2%. Nondefense spending decreased 3.2%, compared with a decrease of 3.6%.
• Real state and local government consumption expenditures and gross investment increased 0.3%, versus a decrease of 1.3%.
• Real private inventories added 0.41 percentage point to the second-quarter change in real GDP after adding 0.93 percentage point to the first-quarter change.
• Real final sales of domestic product rose by 1.3% in the second quarter, compared with an increase of 0.2% in the first.

Now that GDP is stronger than expected, and with strong ADP payrolls, we have S&P 500 futures down by two points and DJIA futures down 31 points. Again, all of the revisions and the change in methodology were setting today’s GDP report to be a wild card or even overlooked.

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