Research - JULY 31, 2014

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GDP grows by 4% annualized in Q2

by Reg Clodfelter

Following a GDP contraction of 2.1 percent during first quarter 2014 — the first U.S. GDP contraction in three years — U.S. GDP rebounded in a big way in the second quarter, growing by 4 percent (annualized), according to an advance estimate from the U.S. Bureau of Economic Analysis.

However, a closer look at the situation may temper excitement.

“This GDP number is really more of a bounce back from the mostly weather-influenced first quarter number,” explains economist Justin Schubert. “And a big part of that was inventories.”

In addition to private inventory investment, the BEA also cited the growth of personal consumption expenditures, which increased by 2.5 percent in the quarter, more than double the growth from the first quarter.

“The GDP growth was somewhat anticipated,” adds Walter Page, director of office res

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