US economy sees 2.3 pct increase in spring

WASHINGTON, July 30 (KUNA) -- The US gross domestic product (GDP) rose by 2.3 percent from April to June, it was announced Thursday.
It is a marked improvement from the first quarter, as low gas prices meant Americans had more disposable income to spend, following the less active winter months.
First-quarter GDP growth was revised up from a 0.2 percent decline to a 0.6 percent increase, a White House statement said.
"In the second quarter, the rise in GDP growth was led by a faster pace of personal consumption growth than the first quarter and a shift from negative to positive net export growth. The drag from declining structures investment was also much less negative for overall growth in the second quarter than in the first," Jason Furman, Chairman of the Council of Economic Advisers explained. Real private domestic final purchases (PDFP), which is the sum of consumption and fixed investment, rose 2.5 percent in the spring, "slightly faster than overall GDP but below the pace observed over the past year," the statement revealed. The Bureau of Economic Analysis announced it had revised its figures going back to 2011, "based on a number of technical factors including new and revised source data, updated seasonal adjustment factors, and methodological changes." "The consumption revision largely reflects a new methodology for calculating the price of financial services spending and revisions to source data on services. Government spending growth was also revised downward, mostly reflecting lower-than-estimated State and local spending, but also lower-than-estimated Federal defense spending," the statement said.
Last year's real GDP growth, over all four quarters, was revised up from 2.4 percent to 2.5 percent, it noted. The BEA will also begin publishing the Gross Domestic Output (GDO) next month, which is the average of the GDP and GDI (Gross Domestic Income).
"GDP and GDI are conceptually identical, but they differ due to measurement error," Furman explained. "[GDO] can be a more accurate measure of economic activity because averaging across the two metrics reduces that measurement error." (end) ys.tg