GDP Growth Revised Up to 3.9 Percent for Final Q2 Estimate

first_img The Best Markets For Residential Property Investors 2 days ago Home / Daily Dose / GDP Growth Revised Up to 3.9 Percent for Final Q2 Estimate in Daily Dose, Featured, Market Studies, News Previous: Will Rep. Hensarling Seek to Become the Next Speaker of the House? Next: Third-Party Servicing Portfolios for Big Banks Continue Drastic Decline Data Provider Black Knight to Acquire Top of Mind 2 days ago The national gross domestic product (GDP) growth was revised upwardly to an annual rate of 3.9 percent in the third and final estimate for the second quarter released by the Bureau of Economic Analysis (BEA) on Friday.In the second estimate for Q2 released in August, real GDP grew at an annual rate of 3.7 percent; in the “advance estimate” released at the end of July, it grew at a rate of 2.3 percent. In the third and final estimate for Q1, GDP growth was a mere 0.6 percent, way below expectations.”The acceleration in real GDP in the second quarter reflected an upturn in exports, an acceleration in personal consumption expenditures (PCEs), a deceleration in imports, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in private inventory investment and in federal government spending,” the BEA said in its report.While the dramatic improvement in GDP growth for Q2 is a sign that the economy has rebounded from an extremely slow first quarter, housing’s share of the GDP actually declined in Q2 down to 15.31 percent, according to Robert Dietz, VP for Tax and Market Analysis with the National Association of Home Builders. The home building and remodeling component of the GDP, otherwise known as the residential fixed investment (RFI), expanded for the third straight quarter up to 3.21 percent of the total GDP. Without that RFI expansion, the GDP growth would have been less for Q2, according to Dietz.”For the second quarter, RFI was 3.21 percent of the economy, reaching a $524 billion seasonally adjusted annual pace (measured in inflation adjusted 2009 dollars),” Dietz said. “This is the highest quarterly rate for RFI since the first quarter of 2008. The second quarter growth for RFI added 0.3 points to the headline GDP growth rate (i.e. GDP would have expanded 3.6 percent absent the RFI contribution).”Housing services, including gross rents paid by renters, owners’ imputed rent (estimate of the cost to rent owner-occupied units), and utility payments combine to make up the second impact of housing on GDP. In Q2, housing services made up 12.1 percent of GDP growth, which calculates to an annual seasonally adjusted rate of $1.98 trillion. The 12.1 percent for housing services and 3.21 percent for RFI combined to make up housing’s share of the GDP for Q2, which was 15.31 percent.”Historically, RFI has averaged roughly 5 percent of GDP while housing services have averaged between 12 and 13 percent, for a combined 17 to 18 percent of GDP,” Dietz said. “These shares tend to vary over the business cycle.” The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Related Articles  Print This Post Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. Demand Propels Home Prices Upward 2 days ago Tagged with: GDP Housing Market U.S. Economycenter_img GDP Housing Market U.S. Economy 2015-09-25 Brian Honea September 25, 2015 1,008 Views Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago GDP Growth Revised Up to 3.9 Percent for Final Q2 Estimate Subscribe About Author: Brian Honea Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days agolast_img read more