Surprise Growth!

Chart of the Week for August 1-7, 2003

GDP measures the total production and consumption of goods and services in the U.S. Consensus estimates called for second quarter growth of only 1.4%. However, the preliminary figure for the quarter suggests that actual growth came in at 2.4%. The lone negative influence on GDP came, as expected, from the growing trade imbalance the U.S. has with its trading partners. All other components of GDP showed substantial improvements over the first quarter. One of the most important increases occurred in business spending, widely viewed as a necessity for economic growth. This quarter marked only the second increase in business spending over the past two years. If business spending continues to rise, the economy may truly emerge into a period of sustained growth.

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