The Bureau of Economic Analysis (BEA) released the third estimate of real GDP growth for the second quarter of 2011. GDP growth was revised upward to a 1.3 percent seasonally adjusted annual rate, from the second estimate of 1.0 percent.
From the BEA’s press release:
“The third estimate of the second-quarter increase in real GDP is 0.3 percentage point, or $11.3 billion, higher than the second estimate issued last month, primarily reflecting an upward revision to personal consumption expenditures, a downward revision to imports, and an upward revision to exports.”
Personal consumption expenditures grew at a tepid 0.7 percent annual rate, rather than the earlier estimate of 0.4 percent, down from 2.1 percent in the first quarter. Exports grew at a 3.6 percent annual rate, instead of 3.1 percent, while imports (a subtraction from GDP growth) grew more slowly, 1.4 percent instead of 1.9 percent. These factors account for the bulk of the upward revision.
The bigger picture remains the same as in the last post, following the second estimate. This slow pace of growth is not enough to lower the unemployment rate, leaves the economy vulnerable to further shocks, and leaves us in a position where we cannot afford policy mistakes.