2012 Economic Calendar
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Released On 9/27/2012 8:30:00 AM For Q2(f):2012
PriorConsensusConsensus RangeActual
Real GDP - Q/Q change - SAAR1.7 %1.7 %1.5 % to 2.0 %1.3 %
GDP price index - Q/Q change - SAAR1.6 %1.6 %1.6 % to 1.6 %1.6 %

Real GDP growth was unexpectedly revised down for the second quarter. The Commerce Department is now estimating growth at a 1.3 percent annualized pace, compared to the second estimate of 1.7 percent and advance estimate of 1.5 percent. Analysts forecast a 1.7 percent growth rate. The latest number is sharply slower than the 2.0 percent seen in the first quarter and especially the 4.1 percent boost posted for the fourth quarter of last year.

Downward revisions to components were widespread, including slower growth to personal consumption, nonresidential structures investment, and residential investment. Inventory growth was slower and net exports were somewhat more negative. Minor upward revisions were seen in equipment & software investment and government purchases dipped slightly less.

Final sales of domestic product increased a downwardly revised 1.7 percent, compared to an annualized 2.0 percent for the second estimate. Final sales to domestic purchasers (excludes net exports) were revised down to 1.4 percent annualized versus the second estimate of 1.6 percent.

The GDP price index was unrevised at a 1.6 percent annualized increase, matching expectations.

The bottom line is that the recovery slowed sharply in the second quarter and growth in the third quarter has been uneven. Looking ahead, today's durables report was discouraging for the third quarter but the drop in initial jobless claims was encouraging.

Consensus Outlook
GDP growth for the second quarter for the second estimate was revised up to 1.7 percent annualized, compared to the initial estimate of 1.5 percent and to 2.0 percent in the first quarter. The mix of component revisions was mostly favorable. The upward revision was due to higher estimates for personal consumption, nonresidential structures, and exports. Also, import growth was revised down and government purchases fell less than previously estimated. Pulling down on the second revisions were lower estimates for growth in equipment & software, residential investment, and inventories. The downward revision to inventory growth was notable in that businesses are keeping stocks under control. Economy-wide inflation according to the GDP price index was unrevised at 1.6 percent annualized. The median market forecast was for 1.6 percent.

Gross Domestic Product represents the total value of the country's production during the period and consists of the purchases of domestically-produced goods and services by individuals, businesses, foreigners and government entities. Data are available in nominal and real (inflation-adjusted) dollars, as well as in index form. Economists and market players always monitor the real growth rates generated by the GDP quantity index or the real dollar value. The quantity index measures inflation-adjusted activity, but we are more accustomed to looking at dollar values.

Household purchases are counted in personal consumption expenditures -- durable goods (such as furniture and cars), nondurable goods (such as clothing and food) and services (such as banking, education and transportation). Private housing purchases are classified as residential investment. Businesses invest in nonresidential structures, durable equipment and computer software. Inventories at all stages of production are counted as investment. Only inventory changes, not levels, are added to GDP.

Net exports equal the sum of exports less imports. Exports are the purchases by foreigners of goods and services produced in the United States. Imports represent domestic purchases of foreign-produced goods and services and must be deducted from the calculation of GDP. Government purchases of goods and services are the compensation of government employees and purchases from businesses and abroad. Data show the portion attributed to consumption and investment. Government outlays for transfer payments or interest payments are not included in GDP.

The GDP price index is a comprehensive indicator of inflation. It is typically lower than the consumer price index because investment goods (which are in the GDP price index but not the CPI) tend to have lower rates of inflation than consumer goods and services. Note that contributions of each component, as averaged over the prior year, are tracked in the table below (components do not exactly sum to total due to chain-weighted methodology). Consumption expenditures, otherwise known as consumer spending, has over history been steadily making up an increasing share of GDP.  Why Investors Care
Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.
Data Source: Haver Analytics
It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes.
Data Source: Haver Analytics

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