GDP beat second quarter estimates of 1 percent easily. However, the BEA revised first quarter growth down from 1.7% to 1.1%.



Is this a good thing, a bad thing, or nonsense?



The correct answer is "nonsense". One look at BEA GDP Release is all it takes to determine the answer.



The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.3 percent in the second quarter, compared with an increase of 1.2 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 0.8 percent in the second quarter compared with 1.4 percent in the first.

Official GDP with the BEA’s GDP deflator (0.71% which is rounded in the popular press to 0.7%) gives us the official GDP of 1.67%, which rounds to 1.7%

GDP with a hypothetical 1.6% deflator (as forecast by Briefing.com) would have been 0.78%, which rounds to 0.8%.

GDP with the average deflator over the past 14 quarters (which is 1.75%) would have been 0.64%, which rounds to 0.6%.

My friend "BC" saysDoug Short at Advisor Perspectives came up with similar conclusions via email.Doug writesMike "Mish" Shedlockhttp://globaleconomicanalysis.blogspot.com