In the second quarter of 2018, the nation’s economy grew at a faster pace than in the first quarter. According to the “advance” estimate released by the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 4.1 percent in the second quarter of 2018. It was the strongest quarter of growth since the third quarter of 2014 and the 17th consecutive quarter of growth. In the first quarter, GDP grew at an annual rate of 2.2 percent, revised upward from 2.0 percent.
Economic growth over the second quarter largely reflected a jump in exports and rising personal consumption expenditures (PCE), which, alone, accounts for about 70 percent of the overall economy. Government spending and investment also rose, as did imports. However, an increase in imports lowers economic growth. At the same time, the increases in exports, PCE, and government spending were also offset somewhat by a decline in gross private domestic investment.
The acceleration in economic growth reflected a faster climb in PCE, exports, and government spending and investment. Meanwhile, gross private domestic investment declined after growing in the first quarter. The change in private inventories, which contributed 0.27 percentage points to growth in the first quarter, subtracted one percentage point from growth in the second quarter. A slower increase in imports relative to the first quarter, led to a smaller subtraction from overall GDP growth.