2nd quarter GDP; July’s jobs report; June’s income and outlays, construction spending, and JOLTS

The key economic releases from the past week were the 1st, or advance estimate of 2nd quarter GDP and the June report on Personal Income and Spending, both from the Bureau of Economic Analysis, the Employment Situation Summary for July and the Job Openings and Labor Turnover Survey (JOLTS) for June, both from the Bureau of Labor Statistics, and a June report that included metrics which were only estimated in the week’s release of 2nd quarter GDP: the June report on Construction Spending (pdf) from the Census Bureau…Last week also saw the release of the last regional Fed manufacturing survey for July: the Dallas Fed’s Texas Manufacturing Outlook Survey, which also covers adjacent western Louisiana and southeastern New Mexico, indicated its general business activity index rose to +0.9 in July from -12.7 in June, indicating a small plurality of Texas businesses are now experiencing improvement, after five months wherein the majority had reported a slowdown..

Privately issued reports included the ADP Employment Report for July, the light vehicle sales report for July from Wards Automotive, which is the source data for the BEA report, and which reported that vehicles sold at a 16.41 million annual rate in July, up from the 15.72 million annual rate in June, and up from the 15.8 annual sales rate of July 2024, and the S&P CoreLogic Case-Shiller home price indexes for May from S&P Global, which is based on a 3-month average of March, April and May home repeat sales closing prices, and which reported that their national home price index was 2.3% higher than their home price index over the same three months of a year ago, down from the 2.7% annual increase reported for April, and down from the 5.9% annual increase reported a year ago…. this week also saw the first monthly purchasing manager’s survey from the Institute for Supply Management (ISM): the July Manufacturing Report On Business indicated that the manufacturing PMI (Purchasing Managers Index) fell to 48.0% in July, down from 49.0% in June, which means that a larger plurality of manufacturing industry purchasing managers reported deteriorating conditions in various facets of their business in July than a month earlier…

Seasonally Adjusted Jobs Rose by 73,000 in July, Unemployment Rate Rose to 4.2%

The Employment Situation Summary for July from the Bureau of Labor Statistics reported the smallest increase in payroll jobs since October of last year, before the job increases for May and June were revised to the two smallest payroll job increases since the pandemic induced 2020 recession, while all the employment metrics from the household survey deteriorated at the same time…seasonally adjusted estimates extrapolated from the establishment survey data projected that employers added 73,000 jobs in July, after the payroll job increase for May was revised down by 125,000, from 144,000 jobs to 19,000 jobs, and the June jobs increase was revised down by 133,000, from 147,000 to 14,000 jobs….with those revisions, that means that this report indicates there were 185,000 fewer jobs in July than was reported last month, and also means that increases in seasonally adjusted non-farm payrolls have averaged 85,300 per month over the first seven months of 2025, compared to the average job increase of 202,400 per month over the first seven months of 2024, the average job increase of 257,700 per month over the first seven months of 2023, and the average 417,700 per month increase over the first seven months of 2022…..the unadjusted data shows that there were actually 1,066,000 fewer payroll jobs extant in July than in June, as the large seasonal job cutbacks associated with the end of the school year were normalized by the seasonal adjustments, leading public education jobs to show a modest 10,400 job decrease…

Outside of that, seasonally adjusted job increases were concentrated in health care and social assistance, while manufacturing, wholesale trade, and the federal government also saw modest job losses..…since the BLS summary of the job gains by sector is clear and usually as detailed than our usual synopsis, we’ll just quote from that summary here:

• Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April. Over the month, employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs. (See table B-1.)
• In July, health care added 55,000 jobs, above the average monthly gain of 42,000 over the prior 12 months. Over the month, job gains occurred in ambulatory health care services (+34,000) and hospitals (+16,000).
• Social assistance employment continued to trend up in July (+18,000), reflecting continued job growth in individual and family services (+21,000).
• Federal government employment continued to decline in July (-12,000) and is down by 84,000 since reaching a peak in January. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; and other services

The establishment survey also showed that average hourly pay for all employees rose by 12 cents an hour to $36.44 an hour in July, after it had increased by a revised 10 cents an hour in June; at the same time, the average hourly earnings of production and non-supervisory employees increased by 8 cents to $31.34 an hour…employers also reported that the average workweek for all private payroll employees was up by 0.1 hour to 34.3 hours, while hours for production and non-supervisory personnel was up by 0.1 hour to 33.7 hours ….at the same time, the average manufacturing workweek was unchanged at 40.1 hours, while average factory overtime was down by 0.1 hour to 2.8 hours..

Meanwhile, the seasonally adjusted extrapolation from the July household survey estimated that the number of those employed fell by 260,000 to 163,106,000, while the similarly estimated number of those counted as unemployed rose by 221,000 to 7,236,000, which thus meant that July saw a net decrease of 39,000 in the total labor force…since the working age population had grown by 200,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by 239,000 to 103,443,000….meanwhile, the 39,000 decrease of those in the labor force was enough to lower the labor force participation rate, from 62.3% in June to 62.2% in July, which was also down from 62.7% in July of 2024 and the lowest since November 2022….at the same time, the decrease in number employed vis-a-vis the larger increase in the population was enough to lower the employment to population ratio, which we could think of as an employment rate, by 0.1% to 59.6%, its lowest since December 2021….moreover, even with the decrease in the total labor force, the jump in those unemployed was enough to raise the unemployment rate from 4.1% to 4.2%, near where its been for the past year….at the same time,the number who reported they were involuntarily working part time rose by 187,000 to 4,559,000 in July, which was enough to raise the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, from 7.7% in June to 7.9% in July, matching the highest rate since February ….

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open alongside the press release to avoid the need to scroll up and down the page..

2nd Quarter GDP Grew at 3.0% Rate on Reversal of 1st Quarter Imports, Higher Personal Consumption

Our economy grew at a 3.0% rate in the 2nd quarter, in contrast to the 0.5% contraction in the first quarter, as the record imports that ​t​urned 1st quarter GDP ​negative were reversed, and personal consumption of goods and services grew modestly, offsetting a big drop in private inventory investment and lower exports… the Advance Estimate of 2nd Quarter GDP from the Bureau of Economic Analysis estimated that the real output of goods and services produced in the US grew at a 3.0% annual rate over the output of the 1st quarter of this year, when our real output shrunk at a ​0​.5% rate… In current dollars, our second quarter GDP grew at a 5.02% annual rate, increasing from what would work out to be a $29,962.0 billion a year rate in the 1st quarter to a $30,331.1 billion annual rate in the 2nd quarter, with the headline 3.0% annualized rate of increase in real output arrived at after annualized GDP inflation adjustments averaging 2.0% were computed from the price changes of the GDP components and applied to their current dollar change..

As is usual with an advance estimate, the BEA cautions that the source data is incomplete and also subject to revisions, which have averaged +/-0.6% in either direction before the third estimate for the quarter is released, which will be two months from now….note that June construction, June trade in services, and non-durables inventory data have yet to be reported or estimated by the agencies responsible, and that the BEA assumed an $8.9 billion decrease in exports of services, a $5.1 billion decrease in imports of services, a $7.7 billion decrease in residential construction, a $2.6 billion decrease in non-residential construction, a $0.1 billion increase in public construction, and a $1.0 billion increase in nondurable factory inventories for June before they estimated 2nd quarter output (see the Key source data and assumptions excel file that accompanies this report for more specific details)..

While we cover the details on the 2nd quarter below, remember that the GDP news release reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a change roughly four times of that what actually occurred over the 3 month period, and that the prefix “real” is used to indicate that each change has been adjusted for inflation using price indexes chained from 2017 prices, and then that all percentage changes in this report are calculated from those ‘2017 dollar’ figures, which would be better thought of as quantity indexes than as any reality based dollar amounts, because the change in real GDP is not a monetary metric…

For our purposes, all the data that we’ll use in reporting the changes here comes directly from the pdf for the 1st estimate of 2nd quarter GDP, which we find linked to on the BEA’s GDP page, which also links to just the tables on Excel and other technical notes. Specifically, we refer to table 1, which shows the real percentage change in each of the GDP components annually since 2020 and quarterly since the third quarter of 2021, table 2, which shows the contribution of each of the components to the GDP figures for those quarters and years; table 3, which shows both the current dollar value and inflation adjusted value of each of the GDP components; and table 4, which shows the change in the price indexes for each of the GDP components…

Personal consumption expenditures (PCE), which accounts for roughly ​6​9% of GDP, grew at a 3.55% rate in current dollars in the 2nd quarter, down a bit from the first quarter’s personal consumer spending nominal increase at a revised 4.13% rate, but after inflation adjustments were made with PCE price indices increases of 3.7% for the first quarter and 2.1% for the 2nd quarter, real PCE rose at a 1.5% rate in the 2nd quarter after rising at a 0.5% rate in the first…consumer spending for durable goods rose at a nominal 6.9% rate, as an increase in spending for motor vehicles and parts accounted for most of the gain, but since the weighted prices for those durable goods rose at a 3.1% rate, the real output of durable goods represented by that spending only increased at a 3.7% rate.…at the same time, current dollar consumer spending for non-durable goods was virtually unchanged, as greater spending on groceries, clothing and other non-durables was offset by a drop in spending for gasoline, while the PCE price index for non-durable goods fell by 1.3%, which meant that real growth in consumption of non durable goods was at a 1.3% rate….similarly, the 4.1% current dollar growth rate in personal spending for services, half of which was for housing services and utilities, was deflated by a rounded 2.9% PCE services price index increase to show the 2nd quarter’s real growth in services was at a 1.3% rate….thus, with modest real growth in all the components of personal consumption expenditures, our increased output of consumer durable goods added 0.27 percentage points to the change in GDP, real growth in non-durable goods output for consumers added 0.18 percentage points to 2nd quarter GDP growth, and real growth in services provided to consumers added 0.53 percentage points to the growth rate of 2nd quarter GDP…

Just as personal consumption expenditures are adjusted for inflation using the PCE price indices to arrive at real PCE, the other current dollar components of GDP are also adjusted for inflation with the price indexes shown in table 4 of the GDP pdf to yield the real change in the output of goods or services…..hence, real gross private domestic investment, which had grown at a 23.8% annual rate in the 1st quarter as investment in inventories surged, shrunk at a 15.6% annual rate in the 2nd quarter, as inventory growth shrunk…moreover, real fixed investment grew at a 0.4% rate in the second quarter after growing at a 7.6% rate in the first quarter, as real nonresidential fixed investment grew at a 1.9% annual rate, down from the 10.3% growth rate reported for the first quarter, as real investment in non-residential structures shrunk at a 10.3% rate, down the first quarter’s real contraction rate of 2.4%, while real investment in equipment grew at a 4.8% rate, down sharply from the first quarter’s 23.7% real growth, and​ as investment in intellectual property grew at 6.4% rate, up from the first quarter’s 6.0% growth rate….after those changes, real investment in non-residential structures subtracted 0.33 percentage points, ​w​hile real investment in equipment added 0.26 percentage points to the growth of GDP and investment in intellectual property added 0.34 percentage points to GDP….on the other hand, real residential investment fell at a 4.6% rate, after shrinking at a 1.3% rate in the first quarter, and subtracted 0.19 percentage points from the 2nd quarter’s GDP, leaving the total fixed investment contribution to GDP at just 0.08 percentage points…for an easy to read table as to what’s included in each of those investment categories, see the NIPA Handbook, Chapter 6, page 3…

Meanwhile, a decrease in private inventories in the 2nd quarter decreased gross investment and hence GDP, as real private inventories were down by an inflation adjusted $26.0 billion in the 2nd quarter, after growing at an inflation adjusted $160.5 billion in the first quarter, and as a result the $186.5 billion decrease in real inventory growth subtracted 3.17 percentage points from the 2nd quarter’s growth rate, after an inflation adjusted $151.6 billion increase in inventory growth in the 1st quarter had added 2.59 percentage points to that quarter’s GDP growth rate….however, shrinking inventories indicate that less of the goods produced during the quarter were left sitting on a shelf or in storage, so their quarter over quarter decrease at a $186.5 billion rate meant that real final sales of GDP were relatively greater by that amount, and hence real final sales of GDP grew at a 6.3% rate in the 2nd quarter, after real final sales had decreased at a 3.1% rate in the 1st quarter, when the $151.6 billion increase in inventory growth meant that real final sales of GDP were that much lower…

Real exports and real imports both decreased in the 2nd quarter, but our imports shrunk by more than thirty times as much, thus sharply increasing 2nd quarter GDP. ​  Our real exports of goods and services shrunk at a 1.8% rate in the second quarter, after growing at a 0.4% rate in the 1st quarter, while our real imports shrunk at a 30.3% rate in the 2nd quarter, after growing at a 37.9% rate in the 1st quarter. As you might recall, exports are added to GDP because they are part of our production that was not consumed or added to investment in our country (& hence not counted in the GDP computation elsewhere), while increases in imports subtract from GDP because they represent either consumption or investment that was added to another GDP component that shouldn’t have been, because it was not produced domestically. Thus the 2nd quarter decrease in real exports subtracted 0.19 percentage points from 2nd quarter GDP, after the first quarter increase had added 0.04 percentage points to first quarter GDP. On the other hand, since imports subtract from GDP, their decrease at a 30.3% rate conversely added 5.18 percentage points to 2nd quarter GDP, after the first quarter import increase had subtracted 4.66 percentage points from that quarter’s growth. As a result, ​our trade imbalance added a 4.99 percentage points ​t​o 2nd quarter GDP, after our deteriorating trade deficit had subtracted 4.61 percentage points from our GDP in the first quarter…

Finally, real consumption and investment by all branches of government increased at a 0.4% annual rate in the 2nd quarter, after decreasing at a 0.6% annual rate in the 1st quarter, as federal government consumption and investment shrunk at a 3.7% rate, after shrinking at a 4/6% rate in the fist quarter while state and local consumption and investment grew at a 3.0% rate, after growing at a 2.0% rate in the first quarter. Inflation adjusted federal spending for defense grew at a 2.2% rate and added 0.08 percentage points to 1st quarter GDP growth, while real non-defense federal consumption and investment shrunk at a 11.2% rate and subtracted 0.32 percentage points from GDP….note that federal government outlays for social insurance are not included in this GDP component; rather, they are included within personal consumption expenditures only when such funds are spent on goods or services, indicating an increase in the output of goods or services….Meanwhile, state and local government investment and consumption expenditures grew at a 3.0% annual rate and added 032 percentage points to the growth rate of 2nd quarter GDP, as a real increase in state and local investment at an 5.8% annual rate accounted for 0.12 percentage points of that addition to GDP…

NB: although i reviewed this report the way the BEA reported it, i’m on record that the GDP prints for both the 1st and 2nd quarters are inaccurate, because increased imports in the first quarter weren’t showing up in the inventory data until a month or two after they were imported… see my comments here: https://econbrowser.com/archives/2025/04/economy-stumbles-into-2025
if our intention is to estimate the quarterly change in the output of goods and services, we cannot subtract imports that haven’t been added to another GDP component in the same quarter… unfortunately, we don’t have any data that captures that nuance…

June Personal Income Up 0.3%, Personal Spending Up 0.3%; PCE Price Index Up 0.3%, Savings Rate at 4.5%

The data in Thursday’s release of the June Income and Outlays report from the Bureau of Economic Analysis was concurrent with their GDP release on Wednesday, and all the PCE data in the first quarter GDP report we just reviewed actually originated from the data computed and reported here…and like that GDP report, all the dollar values in this report are seasonally adjusted and at an annual rate, ie, they tell us what personal income, spending and saving would be for a year if June’s adjusted income and spending were extrapolated over an entire year…however, the percentage changes are computed monthly, from one annualized figure to the next, and in this case of this month’s report they give us the percentage change in each annualized metric from May to June….

thus, when the opening phrase of the press release for this report tell us “Personal income increased $71.4 billion (0.3 percent at a monthly rate) in June“, it means that the annualized figure for all types of personal income in June, $25,794.1 billion, was $71.4 billion, or almost 0.3% more than the annualized personal income figure $25,722.7 billion for May; the actual increase in personal income from May to June is not given….similarly, disposable personal income, which is income after taxes, also rose by almost 0.3%, from an annual rate of $22,476.2 billion in May to an annual rate of $22,537.2 billion in June…the monthly contributors to the change in personal income, which can be seen in the Full Release & Tables (PDF) for this release, are also annualized….the main contributors to the $71.4 billion annualized increase in personal income in June were a $45.9 billion annual rate of increase in government social benefits to persons, a $17.2 billion increase in income from wages and salaries, and a $10.0 billion annualized increase in employer contributions for employee pension and insurance funds…

At the same time, seasonally adjusted personal consumption expenditures (PCE) for June, which were included in the change in real PCE in the 2nd quarter GDP report, rose at a $69.9 billion annual rate to an annual rate of $20,685.2 billion in consumer spending, an increase of more than 0.3% from May’s PCE, which itself was revised from the previously reported annual rate of $20,592.7 billion to $20,615.2 billion….total personal outlays for June, which includes interest payments, and personal transfer payments in addition to PCE, rose by an annualized $69.5 billion to $21,529.5 billion, which left personal savings, which is disposable personal income less total outlays, at a $1,007.8 billion annual rate in June, down a bit from the revised $1,016.2 billion in annualized personal savings in May…as a result, the personal saving rate, which is personal savings as a percentage of disposable personal income, was unchanged at 4.5% in June, but still down from the revised 5.0% savings rate in April, which had been a 12 month high…

While our personal consumption expenditures accounted for 69.0% of our nominal second quarter GDP, before those expenditures could be included in the national measurement of the change in our output, they were first adjusted for inflation, to give us the real change in consumption, and hence the real change in goods and services that were produced for that consumption…..the BEA does that by generating a price index for personal consumption expenditures, which is included in this report, which is a chained price index based on 2017 prices = 100….from Table 5 in the pdf for the June release, we find that the PCE index rose from 126.201 in May to 126.555 in June, giving us a month over month inflation rate of 0.280505%, which BEA reports as an increase of +0.3%, even as the full decimal fraction is used in all their computations….at the same time, Table 7 gives us a year over year PCE price index rounded to an increase of 2.6%, and a core price increase, excluding food and energy, of 2.8% for over the past year, both still above the Fed’s inflation target….applying the June inflation adjustment to the change in June PCE shows that real PCE was up 0.058885% in June, which the BEA reports as a 0.1% increase in their rounded tables…note that when those PCE price indexes are applied to a given month’s annualized current dollar PCE, it yields that month’s annualized real PCE in chained 2017 dollars, which aren’t really dollar amounts at all, but merely the means that the BEA uses to compare one month’s or one quarter’s real goods and services produced to another’s….those results are shown in table 4 of this report’s PDF, where you’ll see the monthly figures shown average out to the same quarterly figures shown in table 3 of the 2nd quarter GDP report, and which were used to compute the contribution of real personal consumption of goods and services to GDP..

Job Openings, Hiring, and Job Quitting were Lower in June; Layoffs were Little Changed

The Job Openings and Labor Turnover Survey (JOLTS) report for June from the Bureau of Labor Statistics estimated that seasonally adjusted job openings fell by 275,000, from 77,712,000 in May to 7,437,000 in June, after May’s job openings were revised 55,000 lower, from 7,769,000 to 77,712,000 …however, June’s jobs openings were 0.3% higher than the 7,412,000 job openings reported for June of a year ago, while the job opening ratio expressed as a percentage of the employed fell from 4.6% in May to 4.4% in June, and was down from the 4.5% rate of June a year ago…the greatest percentage drop in June job openings was in the accommodation and food services sector, where openings fell by 308,000 to 754,000, while job openings in the information sector rose by 67,000 to 244,000 (see table 1 for details on other categories of job openings)…like most BLS releases, the press release for report is easy to understand and also refers us to the associated table for the data cited, which are linked at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in June, seasonally adjusted new hires totaled 5,204,000, down by 261,000 from the revised 5,655,000 who were hired or rehired in May, as the hiring rate as a percentage of all employed fell to 3.3% from 3.4% in May, but it was higher than the 3.2% hiring rate in June a year earlier (details of hiring by industry since January are in table 2)….meanwhile, total separations decreased by 153,000, from 5,213,000 in May to 5,060,000 in June, as the separations rate as a percentage of the employed fell from 3.3% to 3.2%, which was unchanged from the 3.2% separations rate of June a year ago (see table 3)…subtracting the 5,060,000 total separations from the total hires of 5,204,000 would imply an increase of 144,000 jobs in June, somewhat more than the revised payroll job increase of 179,000 for June that was reported by the July establishment survey later in the week, but still with the expected +/-110,000 margin of error in these incomplete employment extrapolations…

Breaking down the seasonally adjusted job separations, the BLS finds that 3,142,000 of us voluntarily quit their jobs in June, down by 128,000 from the revised 3,270,000 who quit their jobs in May, while the ‘quits rate’, widely watched as an indicator of worker confidence, remained unchanged at 2.0% of total employment, while it was still down from the 2.1% quits rate of a year earlier (see details in table 4)….in addition to those who quit, 1,604,000 were either laid off, fired or otherwise discharged in June, down by 7,000 from the revised 1,611,000 who were discharged in May, as the discharges rate was unchanged at 1.0% of all those who were employed during the month, which was up from the discharges rate of 0.8% a year earlier (see table 5)…meanwhile, other separations, which includes retirements and deaths, were at 314,000 in June, down from 332,000 in May, for an ‘other separations rate’ of 0.2%, the same as in May and as in June of last year….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be easily accessed using the links to tables at the bottom of the press release…

Construction Spending Fell 0.4% in June, But Upward Revisions Boost 2nd Quarter GDP

The Census Bureau report on construction spending for June (pdf) estimated that the month’s seasonally adjusted construction spending would work out to $2,136.2 billion annually if extrapolated over an entire year, which was 0.4 percent (±0.8 percent)* below the revised annualized estimate of $2,143.9 billion of construction spending for May, and 2.9 percent (±1.5 percent) below the estimated annualized level of construction spending in June of last year….the May annualized construction spending estimate was revised nearly 0.3% higher, from $2,138.2 billion to $2,143.9 billion, while the annual rate of construction spending for April was revised nearly 0.4% higher, from $2,145.5 billion to $2,153.44 billion…after those revisions, actual construction spending tor the first half of 2025 amounted to $1,036.1 billion, 2.2 percent (±1.2 percent) less than the $1,058.9 billion spent for construction in the first half of 2024..

A further breakdown of the different subsets of construction spending is provided in a Census summary, which precedes the detailed spreadsheets:

• Private Construction: Spending on private construction was at a seasonally adjusted annual rate of $1,621.9 billion, 0.5 percent (±0.5 percent)* below the revised May estimate of $1,630.2 billion. Residential construction was at a seasonally adjusted annual rate of $883.1 billion in June, 0.7 percent (±1.3 percent)* below the revised May estimate of $889.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $738.8 billion in June, 0.3 percent (±0.5 percent)* below the revised May estimate of $741.1 billion.
• Public Construction: In June, the estimated seasonally adjusted annual rate of public construction spending was $514.3 billion, 0.1 percent (±1.6 percent)* above the revised May estimate of $513.7 billion. Educational construction was at a seasonally adjusted annual rate of $112.7 billion, 0.4 percent (±2.6 percent)* above the revised May estimate of $112.2 billion. Highway construction was at a seasonally adjusted annual rate of $144.1 billion, 0.6 percent (±4.8 percent)* above the revised May estimate of $143.2 billion.

Construction spending for all three months of the second quarter was higher than what was reported by the BEA in the advance report for 2nd quarter GDP earlier in the week.…as we noted above, the annual rate of construction spending for April was revised more than $7.9 billion higher, and annualized construction spending for May was revised $5.7 billion higher….in reporting 2nd quarter GDP, the Excel file with key source data and assumptions accompanying the report indicated on line 86 that they had estimated that the annualized value of June’s nonresidential construction would be $2.6 billion less than that of the previously reported May figure, that June’s annualized residential construction on line 109 would be $7.7 billion less than that of the previously reported May figure, and that the value of June’s public construction shown on line 201 would be $0.1 billion more than the previously published May figure…hence, the total of the annualized figures used by the BEA for total June construction in the 2nd quarter GDP report were $10.2 billion less than the previously published May figure…with June construction now reported to be down $7.7 billion from a May figure that was revised $5.7 billion higher, that means that the BEA had underestimated annualized June construction spending by $8.2 billion when reporting 2nd quarter GDP…thus, after averaging the revisions to construction spending for the three months of the 2nd quarter, we find the total revised annualized figure for 2nd quarter construction spending would thus be $7.3 billion more in current dollars than the current dollars figures used by the BEA when computing 2nd quarter GDP, implying we’ll see an upward revision of about 0.09 percentage points to the construction components of 2nd quarter GDP when the 2nd estimate is released on the 28th of August, give or take depending on the mix of inflation adjustments to the revised figures…

 

 

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of this synopsis and my selected links, most of which are chosen from the aforementioned GGO posts, contact me…)