The economy grew at a 6.5% annual rate in Q2. That means:
--Real GDP is now above it's pre-pandemic level (but still below its trend)
--Real GDP growth so far in 2021 is substantially outpacing the pre-ARP forecasts (stay tuned for a graphic on this)
--Real GDP is now above it's pre-pandemic level (but still below its trend)
--Real GDP growth so far in 2021 is substantially outpacing the pre-ARP forecasts (stay tuned for a graphic on this)
Looking at the numbers:
--Extraordinary growth in consumer spending (+11.8%) and business fixed investment (+8.0%). But housing, inventory reductions and reduced net exports subtracted 2pp from the growth rate.
--Extraordinary growth in consumer spending (+11.8%) and business fixed investment (+8.0%). But housing, inventory reductions and reduced net exports subtracted 2pp from the growth rate.
Another Q where demand was very strong: Americans were purchasing a lot of stuff (businesses, consumers, govt). But some of that stuff came out of inventories and imports.
Real Final Sales to Domestic Purchasers up at a 2.1% annual rate since 2019-Q4, same as the pace pre-COVID.
Real Final Sales to Domestic Purchasers up at a 2.1% annual rate since 2019-Q4, same as the pace pre-COVID.
Inventories can't go down much more (are there any left???) So that could mean stronger growth in Q3. BUT, without inventories relieving demand pressures it could also mean more imports and/or higher prices.
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