To estimate the impact of the change in PCE on the change in GDP, we have to compare July's real PCE to the real PCE of the 3 months of the second quarter. When we compare July's inflation adjusted PCE of 12,778.2 billion to the 2nd quarter’s real PCE of 11,819.6 billion, we find that July’s real PCE has grown at a 36.605% annual rate from the 2nd quarter.
The May report Personal Income and Outlays from theBureau of Economic Analysis gives us nearly half the data that will go into 2nd quarter GDP, since it gives us 2 months of data on our personal consumption expenditures (PCE), which accounts for nearly 70% of GDP, and the PCE price index, which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated.
The May report on Personal Income and Outlays, released on Friday, gives us nearly half the data that will go into 2nd quarter GDP, since it gives us 2 months of data on our personal consumption expenditures (PCE), which accounts for more than 69% of GDP, and the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated.
December 2016 retail sales increased by 0.6% and are up a whopping 4.1% from a year ago. November's retail sales were revised to a 0.2% monthly increase. The reason for December's gain were automobile sales, online sales and gas. Auto sales blew through the roof at a 2.4% monthly increase and gas did also on rising prices. Without autos & parts sales, retail sales would have increased only 0.2% for the month.
Over recent days, we’ve seen the release of five reports which provide us with the lions share of contributions to 3rd quarter GDP for the months of July and August.
In addition to the Employment Situation Summary for August from the Bureau of Labor Statistics, last week also saw the release of four July reports that give us the lion's share of that month's contribution to 3rd quarter GDP, and in some cases suggest revisions to 2nd quarter GDP. This post reviews those four reports, with an eye to assessing their impact on GDP growth.
July 2016 retail sales were a real Wall Street let down as there was no change from June. Gasoline sales plunged by -2.7%, yet most retailers had declining sales. Auto sales and Amazon prime day were not enough to salvage overall retail sales. Without autos & parts sales, retail sales would have dropped by -0.3% for the month.
The June personal income and outlays report shows a 0.4% increase in consumer spending. When adjusted for inflation, consumer spending rose 0.3%. Personal income increased 0.2% while real disposable income increased 0.1% for the month. This is decent growth in PCE. From a year ago, real consumer spending has increased 2.8% while real disposable income has increased 2.2%.
With the first Friday of the month, the Employment Situation Summary for May from the Bureau of Labor Statistics was obviously the most widely watched release of last week. But the week also saw the release of four reports for April that give us the lion's share of that month's contribution to 2nd quarter GDP, and in some cases suggest revisions to 1st quarter GDP.
The Second Estimate of our 1st Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 0.8% rate in the 1st quarter, revised up from the 0.5% growth rate reported in the advance estimate last month, as residential investment was revised higher, growth in private inventory investment decreased less than was previously estimated, and exports were down less than had previously been reported.
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