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US Q2 GDP Slows From Q1 Despite Jump in Personal Consumption

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US economic growth, measured by gross domestic product, rose by 1.5% in Q2, after a 2.1% gain in Q1, below a 2.0% increase expected in a survey compiled by Bloomberg.

Personal consumer expenditures rose by 3.2% after a 0.5% gain in Q1.

There were also positive contributions from nonresidential fixed investment and residential fixed investment that were more than offset by negative contributions from private inventories, net exports and government spending, resulting in the slower pace of overall GDP growth.

The gross domestic purchases price index rose by 5.7% after a 3.6% gain in the previous quarter, with the PCE price index up 5.1% after a 4.6% increase.

The second estimate of Q2 GDP is scheduled to be released on Aug. 26.

The quarterly measure of gross domestic product, or GDP, is released by the US Bureau of Economic Analysis at three stages, with the advance reading about a month after the end of a quarter, followed by second and third readings for the same quarter two and three months after quarter-end.

The data are broken down by each of the GDP components: consumption, fixed investment (which includes residential and nonresidential investment and inventories), government spending, and net exports (exports minus imports). The report also includes prices measures for the overall reading and the categories.

Strong GDP growth is a positive for stocks, but a negative for bonds, especially if it is accompanied by sharp inflation gains.

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