2Q09 GDP Unchanged, Initial Jobless Claims Fall, & Corporate Profits Are Up
Written by
US 2Q09 GDP remained unchanged from the advance reading of -1.0%, a month earlier. The consensus estimate for the revision was -1.5%. Despite what was no change in the headline number, there were revisions to the data behind it with exports and consumption being revised up, while inventories and non-residential spending were revised down. Overall weakness in the 2Q09 GDP reading can be attributed to private inventory investment, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and exports. Higher government spending and a decrease in imports have been the biggest positive contributing factor to GDP growth. The improvement from 1Q09’s performance was due to smaller decreases in nonresidential fixed investment and in exports, an increment in federal government spending, smaller declines in private inventory investment and residential fixed investment, and a rise in state and local government spending. (see table below)
Initial jobless claims fell by 10K to 570K, compared to a consensus forecast of 550K. Continuing claims fell by 119K to 6.13mn. Claims data should continue to improve over the months ahead, but will remain well above comfortable levels for at least the remainder of this year, as the unemployment rate will likely exceed 10%. Using a simple regression analysis claims at their current levels would indicate a decline in payrolls of roughly 500K, however, recently this model has been exaggerating the actual effect on payrolls, but nevertheless is a cause for concern going forward.
Corporate profits were up 5.7% on a quarterly basis. In total corporate profits finished the quarter at an annualized 1US$.050trn from US$0.976 trn the prior quarter.
Contributions to Percent Change in Real Gross Domestic Product
| 08:Q1 | 08:Q2 | 08:Q3 | 08:Q4 | 09:Q1 | 09:Q2 | |
| Percent change at annual rate: | ||||||
| Gross domestic product. | -0.7 | 1.5 | -2.7 | -5.4 | -6.4 | -1.0 |
| Percentage points at annual rates: | ||||||
| Personal consumption expenditures | -0.39 | 0.06 | -2.49 | -2.15 | 0.44 | -0.69 |
| Goods | -1.24 | -0.12 | -1.89 | -2.41 | 0.56 | -0.77 |
| Durable goods | -0.75 | -0.46 | -0.95 | -1.64 | 0.28 | -0.43 |
| Motor vehicles and parts. | -0.50 | -0.63 | -0.64 | -0.84 | 0.14 | -0.13 |
| Furnishings and durable | ||||||
| household equipment. | -0.13 | 0.05 | -0.22 | -0.27 | -0.13 | -0.14 |
| Recreational goods and | ||||||
| vehicles | -0.04 | 0.25 | -0.06 | -0.30 | 0.20 | -0.12 |
| Other durable goods | -0.07 | -0.13 | -0.03 | -0.21 | 0.07 | -0.02 |
| Nondurable goods. | -0.49 | 0.35 | -0.94 | -0.78 | 0.29 | -0.35 |
| Food and beverages purchased | ||||||
| for off-premises consumption | 0.05 | 0.03 | -0.29 | -0.41 | 0.03 | 0.20 |
| Clothing and footwear | -0.04 | 0.16 | -0.27 | -0.21 | -0.04 | -0.21 |
| Gasoline and other energy | ||||||
| goods. | -0.23 | -0.11 | -0.42 | 0.27 | 0.17 | -0.01 |
| Other nondurable goods. | -0.27 | 0.27 | 0.04 | -0.43 | 0.12 | -0.33 |
| Services. | 0.85 | 0.17 | -0.60 | 0.26 | -0.13 | 0.09 |
| Household consumption | ||||||
| expenditures (for services). | 0.70 | 0.13 | -0.79 | 0.06 | 0.34 | 0.20 |
| Housing and utilities | 0.33 | 0.11 | -0.18 | 0.46 | 0.02 | -0.15 |
| Health care | 0.65 | 0.28 | -0.06 | 0.19 | 0.37 | 0.25 |
| Transportation services | -0.17 | -0.15 | -0.11 | -0.17 | -0.15 | -0.01 |
| Recreation services | -0.01 | 0.04 | -0.08 | -0.10 | 0.05 | -0.01 |
| Food services and | ||||||
| accommodations | -0.10 | 0.11 | -0.11 | -0.35 | -0.07 | -0.10 |
| Financial services and | ||||||
| insurance. | -0.13 | -0.07 | -0.16 | -0.24 | 0.03 | 0.19 |
| Other services. | 0.13 | -0.18 | -0.09 | 0.27 | 0.10 | 0.02 |
| Final consumption expenditures | ||||||
| of nonprofit institutions | ||||||
| serving households | 0.15 | 0.05 | 0.18 | 0.20 | -0.46 | -0.12 |
| Gross output of nonprofit | ||||||
| institutions | 0.44 | 0.17 | 0.07 | 0.24 | -0.22 | -0.05 |
| Less: Receipts from sales of | ||||||
| goods and services by | ||||||
| nonprofit institutions | 0.29 | 0.12 | -0.11 | 0.04 | 0.24 | 0.07 |
| Gross private domestic investment | -1.20 | -1.66 | -1.04 | -3.91 | -8.98 | -3.20 |
| Fixed investment. | -0.99 | -0.41 | -1.30 | -3.28 | -6.62 | -1.81 |
| Nonresidential. | 0.25 | 0.19 | -0.73 | -2.47 | -5.29 | -1.15 |
| Structures. | 0.27 | 0.56 | 0.00 | -0.31 | -2.28 | -0.59 |
| Equipment and software. | -0.02 | -0.38 | -0.73 | -2.15 | -3.01 | -0.56 |
| Information processing | ||||||
| equipment and software | 0.39 | 0.26 | -0.17 | -0.70 | -0.79 | -0.05 |
| Computers and peripheral | ||||||
| equipment. | 0.12 | 0.03 | -0.19 | -0.19 | -0.08 | 0.07 |
| Software. | 0.22 | 0.09 | -0.06 | -0.17 | -0.47 | -0.21 |
| Other | 0.05 | 0.14 | 0.07 | -0.34 | -0.24 | 0.09 |
| Industrial equipment. | 0.02 | -0.02 | -0.15 | -0.20 | -0.82 | -0.18 |
| Transportation equipment. | -0.27 | -0.58 | -0.54 | -0.87 | -0.92 | 0.09 |
| Other equipment | -0.16 | -0.04 | 0.13 | -0.38 | -0.48 | -0.43 |
| Residential | -1.24 | -0.60 | -0.57 | -0.81 | -1.33 | -0.66 |
| Change in private inventories | -0.21 | -1.25 | 0.26 | -0.64 | -2.36 | -1.39 |
| Farm. | -0.29 | 0.34 | -0.09 | 0.10 | 0.05 | 0.09 |
| Nonfarm | 0.08 | -1.59 | 0.35 | -0.74 | -2.41 | -1.47 |
| Net exports of goods and services | 0.36 | 2.35 | -0.10 | 0.45 | 2.64 | 1.60 |
| Exports | -0.02 | 1.47 | -0.48 | -2.67 | -3.95 | -0.54 |
| Goods | 0.34 | 1.17 | -0.17 | -2.50 | -3.41 | -0.50 |
| Services. | -0.36 | 0.30 | -0.31 | -0.17 | -0.54 | -0.04 |
| Imports | 0.38 | 0.88 | 0.38 | 3.12 | 6.58 | 2.14 |
| Goods | 0.46 | 0.67 | 0.55 | 3.09 | 6.25 | 1.89 |
| Services. | -0.08 | 0.21 | -0.17 | 0.03 | 0.34 | 0.25 |
| Government consumption expenditures | ||||||
| and gross investment | 0.51 | 0.71 | 0.95 | 0.24 | -0.52 | 1.27 |
| Federal | 0.56 | 0.55 | 0.93 | 0.49 | -0.33 | 0.82 |
| National defense. | 0.39 | 0.34 | 0.93 | 0.20 | -0.27 | 0.67 |
| Consumption expenditures. | 0.27 | 0.10 | 0.81 | 0.15 | -0.22 | 0.52 |
| Gross investment. | 0.11 | 0.24 | 0.13 | 0.05 | -0.05 | 0.15 |
| Nondefense. | 0.17 | 0.21 | 0.00 | 0.29 | -0.06 | 0.15 |
| Consumption expenditures. | 0.18 | 0.16 | -0.02 | 0.16 | 0.06 | 0.16 |
| Gross investment. | -0.01 | 0.05 | 0.02 | 0.13 | -0.11 | 0.00 |
| State and local | -0.05 | 0.15 | 0.01 | -0.25 | -0.19 | 0.44 |
| Consumption expenditures. | 0.07 | 0.02 | 0.08 | 0.04 | -0.04 | 0.02 |
| Gross investment. | -0.13 | 0.14 | -0.06 | -0.28 | -0.15 | 0.42 |
| Addenda: | ||||||
| Goods | -0.55 | 0.36 | -1.91 | -4.54 | -2.19 | -1.21 |
| Services. | 0.94 | 0.96 | -0.22 | 0.46 | -0.53 | 1.00 |
| Structures. | -1.12 | 0.13 | -0.55 | -1.30 | -3.70 | -0.80 |
| Motor vehicle output. | -0.64 | -1.08 | -0.15 | -1.41 | -1.69 | 0.20 |
| Final sales of computers. | 0.06 | 0.16 | -0.02 | 0.02 | 0.06 | -0.05 |
Join the discussion