US Second Quarter GDP Revised Sharply Higher To 3.0%, Best In Two Years

Tyler Durden's picture

In a surprise for traders - and the Fed - moments ago the BEA reported that after its first revision of Q2 GDP (a quarter which ended two months ago), the initial estimate of 2.6% was revised to 3.0%, beating expectations of a 2.7% print, and the highest annualized growth rate since Q1 2015. The annualized Q2 GDP was more than double the first quarter number which as a reminder printed at 1.2%

While most components were revised higher in the latest release (with the notable exception of government which downshifted from 0.12% to -0.05%) the bigges contributor to the upward revision was Personal Spending, which surged 3.3% in Q2, after rising 1.9% in Q1, and contributing 2.28% of the bottom GDP line.

As a result, the upward revision to the second estimate of GDP growth mainly reflected revisions to consumer spending on goods and to business investment. The full breakdown is shown below.

Meanwhile, looking at the Fed's preferred inflation indicator, the core PCE, it showed that for one more quarter inflation supposedly remained dormant,  as core PCE rose 0.9% in 2Q, in line with expectations, after rising by 1.8% in the prior quarter.

Today's report also revealed that NIPA corporate profits increased 1.3% in Q2 after dropping 2.1% in the first quarter.

Profits of domestic nonfinancial corporations increased 5.4% after increasing 0.3%. This however was offset by a sharp drop in profits of domestic financial corporations decreased 6.2% after decreasing 7.9%. Somewhat surprisingly, profits from the rest of the world decreased 2.0% after decreasing 2.1%, despite the steep drop in the USD. In total, the BEA reports that corporate profits increased 7.0 percent from the second quarter of 2016.

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JRobby's picture

Blatant lie

To be "adjusted" down in a few months.

_RRR_'s picture

yes but in a few month they tell us Q3 is 4%

WTFRLY's picture

Smells like... a winner...

MFL5591's picture

More lies and more fake news by the TRIBE

Rainman's picture

Recent Headline : " Trump budget relies on 3% growth "  < coincidence >

MillionDollarBonus_'s picture

THis is FAKE NEWS! You people really trust the economic figures coming out an administration that clearly lied about Russian hacking, Hillary's health and just pardoned a known criminal, Sheriff Arpaio?? You people must be mad!

Outward Focus vs Inward Focus

giovanni_f's picture

main contributor to this upbeat number: "personal expenditures". In other words, a credit fueled buying binge lipstick makes a pig look great by pushing the meaningless indicator "gdp" nominally higher. Positive, very positive indeed. Time to back up the truck with FAANG stocks.

lew1024's picture

That was really clever. Nearly upvoted you, before I read the last phrase there.

Trollbots improve before our eyes.

giovanni_f's picture

Shapiro - it might give some a feeling of satisfaction watching a Mini-Duterte  roam the streets of America. But be careful what you wish for. Next time a bunch of Mini-Dutertes may come after you constitutionalists - and they will be equipped with military gear Trump helped them to procure.

ejmoosa's picture

The only "inflation" the Fed sees is in these GDP numbers.

I track the growth of Earnings Per Share for  1500 or so companies and those numbers were already declining in the second quarter....

spastic_colon's picture

and in the equity indexes; if equity follows/predicts inflation then underlying inflation is far far higher than the fake CPI numbers; plus its only 2 more trading sessions to a green month.

ejmoosa's picture

By the way, I see they also revised corporate incomes before and after taxes, as well as proprietors' incomes back to 2014...

And not in a a good way...

The five year annual rate of growth in corporate profits after taxes: 0.47%

One has to go back to the fourth quarter of 2014 to find a lower rate than that.

But hey, things are great!

Got The Wrong No's picture

The Harvey adjustment will be implemented for 3rd quarter. Everything is fine. Condition Shaka Zulu Boom Boom. 

NugginFuts's picture

Who even believes this lie?

<---- The GDP is totally 3%

<---- The lies get bigger as reality gets worse.

Juggernaut x2's picture

Now raise those rates, Janet!

ET's picture

What is the GDP measured in Gold?


SHsparx's picture

Trump's really going to toot his horn now.

Dragon HAwk's picture

So everything is awesome,  Great.. although maybe Health care costs just went up.   More GDP winning

SybilDefense's picture

Wonder who ordered that report?  "After further review all numbers are dramatically higher except government spending which is down bigly.". With a stroke of the keyboard, we are winning so much we are tired of winning.  Buy more stawks!

Fisherman Blue's picture

Bull shit. The BLS are nothing but tax paid liars. Central bank central planed bull shit.

GotAFriendInBen's picture

4th qtr will be 7% with Harvey's help

Just don't concern yourself with the trillion or so lost in past GDPs to Harvey and the future looks brighter than ever

FredGSanford.'s picture

We have turned the corner!

Dutch1206's picture

Why stop at 3%? Just revise it to 10%.

I am Jobe's picture

Yippie. Good Times are here again. Party Time


More Wars please. Need to get Americans to support the Troops and Wars. Wars are good. More caskets and Flowers. 

gmak's picture

Wow. Everything is coming up roses. Thank goodness for spreadsheets where you can change things an dnobody knows, right? right?

GooseShtepping Moron's picture

Retail has absolutely fallen off a cliff in the last two or three weeks, with sales volumes next to nothing. This has yet to be captured by any federal data series, and when it is reported it will be fudged anyway; but the reality is, you can expect an extremely bad 3rd and 4th quarters. The consumer recession has begun.

markitect's picture

wife sells cosmetics into major retailers, says the same.  3rd quarter is usually bad but not this bad.  put this way, cosmetics never go down, at worst they go sideways, total category is down across all channels.

TheRealBilboBaggins's picture

AFter some time trading, I made up my mind to never own stocks in September, and especially never to own them after Labor Day weekend.

Unbelievabubble's picture

Puzzled...why didn't the b@stards use this (and employment figures) as an excuse to monkey hammer gold square in the nuts? Perhaps the big red "SELL BILLIONS!" button has broken through recent over-usage and they're currently running around in mad panic searching for an electrician to come and fix it quickly!

DrewJackson's picture

So Trump has figured out a way to wrestle control of the Stats division of US Government from the Deep State??

Or possibly with anticipation of tax cuts, cutting red tape, and other pro business moves Trump has made or has spoken about does not matter??

Rip van Wrinkle's picture

Your chocolate rations will be increased from 30 grammes per week to 25 grammes per week from Monday.



Decoy 409's picture

What a head fake story full of RIPE B.S.


This will keep the suckers going while the remainer of the dissolve (or that slow heroin drip) runs out.


False pretence THAT adding more BORROWED DEBT to the forest fire in a few short weeks will transpire.


At least the IMF is being sensible. U.S. devaluation of the old king dollar they stated at the meeting is worth 20 cents on the dollar. Now just to get that VIX down to .88 before it's time will help out graciously.

J J Pettigrew's picture


Can we revise the last Fed decision?  

Why are rates STILL BELOW the inflation rate? (9 yrs)

what double speak do you have for us now?

Trucker Glock's picture

"NEW YORK – The Federal Reserve Bank of New York today issued its Quarterly Report on Household Debt and Credit,which reported that total household debt increased by $114 billion (0.9%) to $12.84 trillion in the second quarter of 2017."

Ajax_USB_Port_Repair_Service_'s picture

We needed some good news today! Maybe this good news will save the PPT some money.

Now, what can we revise up tomorrow?

Green_Street's picture

Looks like Trump has his number crunchers in place.

Anyone looking at how much debt the American Public, Corporations and the U.S. government have right now?  

Then add in the unfunded pensions throughout the U.S.

What could possibly go wrong? 

What's sad, is Trump is owning and bragging about the economy.  Going to get really ugly when the house of cards comes apart. 

ludwigvmises's picture

Trump is doing WONDERS for our economy. He's a business mastermind. Thank God we elected him!

adr's picture

Inventory levels are being cut to the bare bones by major big box retailers. Of course with less inventory they can all claim comp increases for their bullshit share prices. 

Under Armour is dead. Dick's is cutting almost half their buy from them for next year. Steph Curry will leave UA as soon as he can, taking what's left of UA's shoe business with him. UAS is a dismal failure and the $1 billion Plank spent on connected fitness is a complete waste. 

The only thing growing is lies.

Berspankme's picture

No shit. I was at a Worst Buy yesterday and they dont have anything in stock. We can get it in 2 days even for a couple simple items.

Byrond's picture

I noticed the same thing. It's what happens when the bottom is about to fall through to the end of everything.

Moving and Grooving's picture

The Walmart SC shelves are overflowing though.

Byrond's picture

Necesseties got more expensive. That's not good.

And why do purchases count when they're loans/debt?

Word of the day: unsustainable

SokPOTUS's picture

All those broken windows, etc. in Houston being repaired and we are going to have 13% growth in Q3.  Krugman won't know whether to laugh or cry.

FreeNewEnergy's picture

I concur that these BLS figures are pure fiction. That said, while gold is still the standard for central banks and SWFs, silver is the unspoken truth, the measuring stick of all wealth.

The gold/silver ratio has been at historic extremes for decades and it is beginning to come closer - though still far off - to historical norms.

Sugarcandy Mountain's picture

I don't believe a single thing any of these fucking liars say.

Not. One. Thing.

Byrond's picture

At least we can count out what they do say. That leaves everything else.