Today the Commerce Department released its revised estimates for second-quarter GDP growth, which came in at 2.5%.
Initial economic reports often get revised in later estimates as more data comes in. (Sometimes they even get revised decades later.) For instance, second-quarter GDP growth was initially thought to be 1.7% at the end of July, but August revisions showed it to be closer to 2.5%, which is where it remains today. That's just one more reason not to overreact to a single report when you're making investment decisions. Investing is about watching the bigger picture, rather than responding to minor adjustments in discrete metrics.
Here's the bigger picture:
Here's how that looks historically:
With the exception of the 2011 congressional showdown that nearly produced another financial crisis, real GDP growth has been ticking along at a moderate -- if not exactly electrifying -- pace for the past few years.
Growth unadjusted for inflation was revised down slightly to 3.1%. The report, which also measures corporate profits, showed a $37.8 billion increase in nonfinancial domestic corporate profits, up from a $3.1 billion decline in the first quarter, due to improvements in retail and utilities, though there was a decline in petroleum and coal profits.
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