The Bureau of Economic Analysis at the US Commerce Department released its first flash estimate of GDP growth for Q2 2015. So the GDP rose at an annual rate of 2.3% in Q2 at a faster pace than in the previous quarter.
The Bureau revised the final Q1 GDP upward to 0.6% from the flash estimate. The increase in real GDP from April to June reflects a rise in personal consumption expenditures (PCE), exports, state and local government spending, and residential fixed investment that were partly offset by negative contributions from federal government spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, got into gear.
The price index for gross domestic purchases grew 1.1% in Q2 compared to a 0.2% increase in Q1. Real personal consumption expenditures rose 2.9% in Q2 from 1.8% in Q1.
However, stock market participants are disappointed by the preliminary GDP figure. Affected by the tepid flash estimate, S&P 500, Dow Jones Industrial Average, and Nasdaq Composite displayed negative dynamics.
Nowadays, the key issue for investors is the funds rate hike. Being aware of it, US Federal Reserve Chair Janet Yellen dropped a hint that interest rates will be raised in 2015 on condition that the US economy does not face any emergency.
The second estimate for Q2 based on more complete data will be released on August 27, 2015.
