Highlights of the first reading on second quarter GDP report from the US Bureau of Economic Analysis:

  • The Q1 final reading was -2.9% (revised to -2.1%)
  • Personal consumption +2.5% vs +1.9% exp
  • Prior personal consumption 1.0% (revised to +1.2%)
  • Consumer spending +2.5%. Spending on durables +14.0%
  • Inventories rose $93.4B vs $35.2B in Q1
  • Inventory change added 1.66 percentage points to GDP, largest since Q4 2011
  • GDP ex-motor vehicles +3.6% vs -2.3%
  • Exports +9.5%, imports +11.7%, biggest rise since Q3 2010

Very strong report, the inflation numbers are high as well. It’s a green-light for the Fed and the US dollar. Watch out for whipsaws in US stocks as the bulls get worried about a hawkish Fed.

Update: The market is wading through the high inventory numbers that have taken the shine off the report a tad but I think that ultimately the dollar will like it.

Here’s what the official release says:

The upturn in real GDP in the second quarter reflected upturns in inventory investment and in exports, an acceleration in consumer spending, an upturn in state and local government spending, an acceleration in nonresidential fixed investment, and an upturn in residential fixed investment that were partly offset by an acceleration in imports.

US GDP annualized