US Economy Rebounds Stronger Than Expected

The United States economy advanced an annualized 4.2 percent in the second quarter of 2014, according to
the second estimate released by the Bureau of Economic Analysis. The new figure comes better than an
advance estimate of 4 percent, as business investment and exports contributed more to the growth.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption
expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local
government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP,
increased.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent
in the second quarter, the same increase as in the advance estimate; this index increased 1.4 percent in the first
quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent,
compared with an increase of 1.3 percent.

Real personal consumption expenditures increased 2.5 percent in the second quarter, compared with an increase of
1.2 percent in the first. Durable goods increased 14.3 percent, compared with an increase of 3.2 percent. Nondurable
goods increased 1.9 percent in the second quarter; it was unchanged in the first. Services increased 0.8 percent,
compared with an increase of 1.3 percent.

Real nonresidential fixed investment increased 8.4 percent in the second quarter, compared with an increase of 1.6
percent in the first. Investment in nonresidential structures increased 9.4 percent, compared with an increase of 2.9
percent. Investment in equipment increased 10.7 percent, in contrast to a decrease of 1.0 percent. Investment in
intellectual property products increased 4.4 percent, compared with an increase of 4.6 percent. Real residential fixed
investment increased 7.2 percent, in contrast to a decrease of 5.3 percent.

Real exports of goods and services increased 10.1 percent in the second quarter, in contrast to a decrease of 9.2
percent in the first. Real imports of goods and services increased 11.0 percent, compared with an increase of 2.2
percent.

Real federal government consumption expenditures and gross investment decreased 0.9 percent in the second
quarter, compared with a decrease of 0.1 percent in the first. National defense increased 0.9 percent, in contrast to a
decrease of 4.0 percent. Nondefense decreased 3.7 percent, in contrast to an increase of 6.6 percent. Real state and
local government consumption expenditures and gross investment increased 2.9 percent, in contrast to a decrease of
1.3 percent.

U.S. Commerce Department | Joana Taborda | joana.taborda@tradingeconomics.com
8/28/2014 1:54:35 PM