Gross Domestic Product for Q2 2016- First Estimate

In the Bureau of Economic Analysis report of GDP released on Friday, economic statistics were revised back to Q1 2013. In these revisions, Q2 and Q4 of 2015 were revised down as was Q1 of 2016. Q1 of 2015 was revised up substantially and Q3 of 2015 was unchanged. The annualized GDP growth rate in the first estimate of the 2nd quarter of 2016 was 1.22 percent which was about half of analysts’ expectations. The result for Q1 2016 was revised down from 1.08 percent to 0.84 percent. GDP is measured and reported in chained 2009 dollars and in the second estimate of Q2 was $16.575 trillion. The growth calculation is misleading because it takes the quarter over quarter change and multiplies by 4 to get an annualized rate. This makes the high quarters higher and the low quarters lower. Figure 1 clearly shows this effect.