US real GDP grew by 4 percent in Q2 2014, according to the advance estimate of GDP. The winter downturn was slightly milder than previously reported, -2.1 rather than -2.9 percent, and 2013 growth was revised upward

1. Economics for your Classroom from
Ed Dolan’s Econ Blog
First Look at GDP for Q2 2014
Show US Economy Stronger
Than Previously Thought
Posted July 30, 2014
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2. July 30, 2014 Ed Dolan’s Econ Blog
US GDP Rebounds in Q2 2014
 The advance estimate from the
Bureau of Economic Analysis
released on July 30 showed that US
real GDP grew at an annual rate of
4.0 percent in Q2 2014
 That represents a sharp rebound
from a 2.1 percent drop in the first
quarter, when GDP growth was
slowed by bad weather and
technical adjustments to
measurement of healthcare
spending

3. July 30, 2014 Ed Dolan’s Econ Blog
Revisions Make Past Quarters Look Stronger
Revisions going all the way back to 1999 made past GDP data look somewhat stronger
than previously announced. The slump in Q1 2014 was revised from -2.9% to -2.1%, and
estimated growth was raised for three of the four quarters of 2013

4. Phases of the Business Cycle
 According to standard terminology, the
recession phase of the business cycle
is the downward movement of GDP
from its previous peak
 It is common to refer to the first phase of
growth following the trough (low point)
of the recession as a recovery. During
that phase, idle equipment goes back
on line and workers return to their jobs.
 Official reports call the entire growth
phase of the cycle an expansion, but
many writers apply that term only after
GDP has reached its previous peak.
 The latest data show that the expansion
resumed in Q2 2014
July 30, 2014 Ed Dolan’s Econ Blog

5. Sources of Growth by Sector
 The renewed growth of GDP in Q2 2014
was broadly based
 Consumption grew at a slightly faster than
average pace
 Investment enjoyed one of its strongest
quarters in years
 An increase in expenditures of state and
local government more than offset a slight
decrease in Federal expenditures
 Exports, which have been a strong point of
the recovery, rebounded strongly from their
winter downturn
Contribution by sector to the
4.0% GDP growth in Q2 2014
Note: Imports are recorded in the national
accounts with a negative sign, so the -.1.85
percentage points shown here represent an
increase in imports
July 30, 2014 Ed Dolan’s Econ Blog

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7. Click here to learn more about Ed Dolan’s Econ texts
or visit www.bvtpublishing.com
For more slideshows, follow Ed Dolan’s Econ Blog
Follow @DolanEcon on Twitter