WASHINGTON (8/29/14)--Gross domestic product expanded at a 4.2% on an annualized basis, according to the Bureau of Economic Analysis (BEA), an upward revision of the BEA's previously reported 4% growth and a reversal of the 2.1% decline in the first quarter.
Consumer spending made the largest contribution adding 1.7 percentage points to the expansion. Inventory investment, exports and fixed investment were also sources of growth (
Aug. 28). Inflation accelerated in the second quarter, led by food and energy prices. Real disposable income growth accelerated.
The biggest drag on growth came from imports, which reduced growth by 1.7%.
Revisions were positive with growth revised up, particularly from final sales. Profits rose 8% (not annualized) mostly reversing the first-quarter decline. Gross domestic income surged 4.7% after falling 0.8% in the first quarter.
Final sales, which exclude the support to GDP from inventories, were weaker, rising 2.8%. That increase follows decline of 1%, which was the largest drop since the first quarter of 2009.
The personal consumption expenditures index showed inflation accelerated in the second quarter. It rose 2.3% in the quarter, up from 1.4% the prior three months. Excluding food and energy, inflation rose 2%, up from 1.2% the prior quarter. Neither figure was revised.