Within the last hour, the U.S. Commerce Department issued data on the nation's gross domestic product for the second quarter, with that metric, the final revision for the period, showing a growth rate of 2.5%. That was exactly where the previous revision had come in, and it was a tenth of a percentage point below the latest consensus estimate for the three months.

Of note, consumer spending, the engine that drives some two-thirds of aggregate growth in the economy, showed an increase of 1.8% for the period. That gain, too, was in line with the prior estimate for the three months. Also, durable goods shipment, earlier estimated to have gained 6.2%, saw that improvement ease back slightly to a gain of 6.1%.

Looking at other aspects of the report, business investment gained 4.7% in the quarter; earlier that increase had been tabulated at 4.4%. Price increases, too, were favorable, with the GDP deflator increasing by 0.6%; earlier, the increase had been estimated at 0.7%.

Meanwhile, if we back out auto output, we find that GDP rose by a lesser rate of 2.2%. One positive note, however, was the fact that inventory accumulation added $56.6 billion to GDP in the latest second-quarter revision. In the first revision, issued a month ago, it had been estimated that inventories contributed $62.2 billion. The modestly smaller contribution suggests that such stockpiles will not have to be worked off as aggressively going forward. That should give a small lift to third-quarter GDP. The initial estimate for that period will be out a month from now. 

Such modest changes in the aggregate composite compare notably with the large swing from the first quarter, when the U.S. gross domestic product had ticked up by just 1.1%.

Overall, GDP contributions were made by personal consumption expenditures, exports, nonresidential fixed investment, inventory accumulation, and residential fixed investment. Reductions in federal government spending and an increase in imports (such overseas shipments subtract from GDP) restrained the advance.

Taken as a whole, this was a reasonable report, and is in line with our forecast for the current half, when we see a somewhat lesser gain in GDP in the third quarter (2.0%-2.5%) and improvement in the 2.5% area in the final three months of the year.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.