Second-Quarter Growth in Selected Industrial Economies

August 30, 2017

United States: A 3.3% rise of personal consumption on a seasonally adjusted annualized rate (SAAR) accounted for 76% of the 3.0% SAAR advance of real GDP. Net exports and non-residential business investment increased, too, and made a collective 1.1 percentage point (ppt) contribution to GDP, while government spending slid 0.3% SAAR on quarter and by 0.1% on year. Real GDP has risen for 13 straight quarters. The current economic upswing began in mid-2009, and real GDP advanced in 30 of the 32 ensuing quarters. The eight-year-long upswing saw real GDP on balance grow at a 2.15% per annum rate. The total and core personal consumption price deflators decelerated last quarter to on-year increases of 1.6% and 1.5%, respectively.

Euroland: Real GDP in the euro area expanded 0.6% (2.5% SAAR) in the second quarter. GDP was also 2.2% greater than in the second quarter of 2016. On an SAAR basis, German GDP last quarter also climbed 2.5%. Growth in The Netherlands (6.2% SAAR) and Spain (3.6%) exceeded Euroland’s average, while the GDP growth rates of Greece (1.8%), Italy (1.6%) and Belgium (1.6%) under-performed the Ezone mean. In year-on-year terms, GDP rose 3.3% in The Netherlands, 3.1% in Spain, 2.1% in Germany, 1.8% in France, 1.5% in Italy and Belgium and only 0.8% in Greece.

Great Britain: Depressed in the wake of the Brexit referendum, economic growth in the U.K. was slower last quarter than in either the United States or Euroland. GDP rose just 1.2% SAAR from the first-quarter level and 1.7% from a year earlier. Personal consumption grew only marginally and at its weakest pace since the final quarter of 2014. Business investment stagnated, and the rate of import expansion matched the growth of exports. Government spending lent some positive support to GDP growth.

Japan: Japanese second-quarter GDP growth at 4.0% SAAR topped the leader board of the economies examined in this update. Half of that increase came from personal consumption, which climbed 3.7% SAAR. Among other components of final domestic demand, non-residential business spending advanced 9.9% SAAR, residential construction went up 6.0% SAAR, and public-sector demand advanced 5.1% SAAR. Inventories augmented GDP growth by 0.2 ppts, but net foreign demand exerted a 1.1-ppt drag on GDP growth, as exports fell 1.9% SAAR and imports rose 5.6% SAAR. Japanese real GDP had grown by less than 2.0% SAAR in each of the three previous quarters, so on-year growth in 2Q17 was only 2.0% versus growth of 2.1% in the United States and 2.2% in the euro area. The Japanese GDP price deflator fell 0.4% between mid-2016 and mid-2017. That represents an undesirable drop from increases of 0.4% in the year to 2Q16 and 1.5% in the year to 2Q15.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: , , ,


Comments are closed.