September 2013 Economic Indicators
Melanie Garza - Director of Operations
Exports on the Rise
September 2013 – GDP Growth in the second quarter beat the original forecast of 1.7% by the U.S. Department of Commerce. On August 29, the Commerce Department revised its original estimate and reported the index climbed to 2.5%. First quarter results were 1.1%. Economists are banking on a stronger second half of 2013 projecting moderate growth; however, unrest in the Middle East may have a negative impact on the U.S. economy slowing the anticipated pace. Last year, third quarter GDP grew at 2.8%.
The increase in exports at 8.6% and nonresidential fixed investment were primary drivers behind the growth. Also contributing were personal consumption expenditures (PCE), private inventory investment, and residential fixed investment. According to the Commerce Department, business investment increased 16.%, with equipment rising 2.9%, and real residential fixed investment closing the quarter with a 12.9% increase.
Federal government spending continued to decline at an actual rate of 0.9% versus the originally reported 0.4%.
Are Businesses Ready to Invest?
The U.S. Department of Commerce released its Corporate Profits (CPGLI) statement along with the GDP release on August 29. The Commerce Department reported Corporate Profits rose 2.6%, overcoming a 0.6% decrease in the first quarter. With business investments including plant and equipment rising the past three months, economists are hopeful the trend continues signaling a more stable US and global economy. With confidence, business should easily be able to hire and invest with pent up profits due to a lack of spending the past several years.
According to the Commerce Department, profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $78.3 billion in the second quarter. During the first quarter, corporate profits fell in contrast $26.6 billion. The CPGLI reflects profits after the taxes paid upon them.
Questions? Please contact Melanie Garza at mgarza@teamCOACT.com