August 2016 Economic Indicators
Melanie Garza - Director of Strategy & Growth
GDP Misses Expectations
Real gross domestic product in the US grew 1.2% in the second quarter, compared to just 0.8% in Q1. With a healthy jobs report, consumer spending and confidence on the rise, economists had predicted a 2.5% increase in the second quarter.
The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE) up 4.2% and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
Private fixed investment fell 3.2% last quarter, making it the largest drop since 2009.
Construction Spending Slips
Construction spending in June dipped 0.6% lower than May’s reading, but is up 0.3% over June 2015.
Residential construction in June remained unchanged, while nonresidential private construction fell 1.3% in June. Commercial spending fell -2.2%, healthcare was down -1.4%, and manufacturing slumped -4.5%. Overall manufacturing investment has fallen -10.4% over the last year. On a positive note, lodging inched up 0.7%, and office construction also climbed 0.4% in June, with both segments up 16% from a year ago.
Spending on public construction also fell in nearly every segment, with overall investment down -0.6%. Educational construction slipped -0.5%, highway spending dropped -1.4% and commercial fell -14% in June. Investment in power climbed 8%, and water supply came in 3.1% higher than June.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com