US GDP in the 2nd quarter grows at an annualized rate of 1.1% – Journal of Commerce

The consumer spending were slightly revised upward, from 4.2% to 4.4% / Photos Public / Mark Santos / USP Images

Washington – the Gross Domestic Product (GDP) of the United States advanced to an annualized rate of 1.1% in the second quarter, according to the second estimate released by the country’s Department of Commerce. The result was in line with the estimates of economists surveyed and pointed slight deceleration compared to the previous reading, which showed annualized growth rate of 1.2% in the period.

The consumer spending were slightly revised upward, for a fee annualized from 4.2% to 4.4%. This was the highest rate of increase in domestic spending since the end of 2014.

The real estate investments, private inventories and government spending, however, weighed on US GDP in the second quarter.

investment in non-residential fixed assets fell 0.9% in annualized terms in the third consecutive quarterly decline.

Corporate profits after taxes and excluding capital adjustments and inventories rose to one seasonally adjusted annual rate of 4.9% in the second quarter from the previous quarter to US $ 1.627 trillion. In the first three months of 2016, growth was 8.9% in the same comparison basis. Corporate profits fell 2.2% in the second quarter compared to the same period last year

Inflation -. And the price index for consumer spending (PCE, its acronym in English) advanced 2.0% in the second quarter in annualized figures, said on Friday the Commerce Department, the second reading of the data. In the first estimate, released in late July, the PCE had advanced 1.9%.

The core PCE, which excludes volatile items like food and energy, was up 1.8% second reading for the second quarter, also slightly above 1.7% advance calculated above. The PCE is the preferred measure of inflation the Federal Reserve, the US central bank.

Monetary policy – The Federal Reserve President Janet Yellen said on Friday that the US BC study several issues related to the implementation of monetary policy, including the possibility a wider range of assets to be purchased in the future.

in a speech on monetary policy read during the annual symposium in Jackson Hole, Yellen argued that the 2008 financial crisis has shown that the tools available to the Fed to time were insufficient, as the emergence of new measures since then, as the quantitative easing program (QE, its acronym in English). She also said that the authorities may consider extending the range of eligible assets to QE, as did the European Central Bank (ECB) and the Bank of Japan (BoJ).
Yellen indicated, however, that the Committee Federal Open Market (FOMC) does not consider measures such as setting a goal for the Gross Domestic Product (GDP) nominal or raising the inflation target.

According to the projections of the FOMC, the interest should accommodate the around 3.0% in the long run, less than half the average of 7.0% recorded between 1965 and 200. Therefore, “we expect to have less room for interest rate cuts to historically had,” he said.

the official estimated that the Fed may again provide “accommodation” if the current expansion to weaken in the short term. In addition to further reduction of interest rates, this could mean a resumption of asset purchases “until conditions improve markedly.”

On the economic outlook, Yellen said she remains “uncertain as ever” despite improvements in the current scenario, which means that “monetary policy is not a pre-defined course.” Despite the strength of the labor market, she noted that business investment remain weak, demand from abroad remains fragile and that the dollar appreciation presses exports. (AE)

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