U.S. gross domestic product — the broadest measure of a nation’s overall economic health — grew at an annual rate of 4.2 percent in the second quarter of 2018, the fastest pace since the third quarter of 2014, according to the second estimate from the Department of Commerce.
The second-quarter growth rate was revised upward from the department’s “advance” estimate, in which it projected a 4.1 percent growth rate.
U.S. GDP grew at a 2.2 percent rate in the first quarter after increasing 2.3 percent in 2017, 1.5 percent in 2016 and 2.9 percent increase in 2015.
GDP is a calculation of the value of the goods and services produced by a nation’s economy minus the value of the goods and services used up in production.
Commerce’s Bureau of Economic Analysis (BEA) said the upward revision reflected higher-than-expected nonresidential fixed investment and private inventory investment, as well as lower imports, which are a subtraction in the calculation of GDP.
Those factors were offset in part by a downward revision in consumer spending, but BEA noted that the “general picture of economic growth remains the same.”
Real exports of goods and services jumped 9.1 percent in the second quarter, down from 9.3 percent in BEA’s first estimate, but still up significantly from a 3.6 percent increase in the first quarter. Imports, meanwhile, slipped 0.4 percent, compared with a previously projected 0.5 percent increase and a 3 percent uptick the previous quarter.
Economists with the Federal Reserve had forecast U.S. GDP to increase at a 2.8 percent rate for all of 2018 before slowing to a 2.4 percent rate in 2019 and 2 percent in 2020, but the latest figures put the economy on pace to reach the Trump administration’s stated goal of 3 percent annual growth.
In slightly less encouraging news for the U.S. economy, the most recent data from Commerce indicates new orders for durable goods slid 1.7 percent to $246.9 billion in July following a revised 0.7 percent uptick in June. The June increase in durable goods followed revised decreases of 0.3 percent in May and 1 percent in April.
Commerce’s Census Bureau noted that orders for transportation equipment, also down in three of the last four months, drove the increase in overall durable goods orders, falling 5.3 percent to $82.8 billion for the month. Excluding orders for transportation equipment, total durable goods orders were up 0.2 percent.
Shipments of manufactured durable goods fell in July after two consecutive monthly increases, slipping 0.2 percent to $250.8 billion, according to Census.