2Q24 GDP: Final Estimate and Revision Deltas

We update the major GDP line items as 2Q24 final numbers stay at +3.0% at the headline level with the 3Q24 period now featuring a fed funds cut.

Sep 26, 2024

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For the final cut of the GDP data, the headline 2Q24 GDP stayed flat at +3.0% as the critical PCE line edged down slightly to +2.8% (see 2Q24 GDP 2nd Estimate: The Power of 3 and Cutting 8-29-24).
Within the PCE line (over 2/3 of GDP), Services edged lower with Goods flat while including a material upward revision in Durables.
Gross private domestic investment (GPDI) added +0.8% to the tally, reaching +8.3% on a material upward revision in Structures while Residential is showing the effects of the stall in activity tied to mortgage rates.
Government added to GDP from the Federal level with revisions upward to +4.3% while State and Local was flat from the second estimate at +2.3% despite the often-heard complaints of economic Armageddon from so many states (see State Unemployment: A Sum-of-the-Parts BS Detector 6-30-24, Employment: Real Numbers vs. Fictitious Dystopian Hellscapes 3-9-24).
The smaller distorting lines (net exports and private inventory) did not have a material impact with net exports delivering a -0.90% haircut and inventories weighing in with a +1.05% contribution for a small net addition to the headline GDP.

The above chart explains itself as it runs through the major deltas since the 2Q24 GDP second estimate. The deltas in the chart run from the key PCE lines across the GPDI lines and then to Government spending. The 2Q24 news is good by post-2000 standards in a new millennium that has been slow growth across Bush, Obama, Trump and Biden. “Grading on the curve” usually starts in 2000 just to make an administration find some good news in the low growth numbers.

We also assume policy architects avoid framing their periods to the vastly superior decades of growth (1980s,1990s) since they might be forced to admit that a bipartisan approach to economic policy yields much better results. That of course would undermine the game plan of maximizing division from the far left and extreme right that serves the pursuit of power.

Only Trump has laid claim to the “greatest economy in history,” which on its face (and in its body) is laughably false (see Presidential GDP Dance Off: Clinton vs. Trump 7-27-24, Presidential GDP Dance Off: Reagan vs. Trump 7-27-24, Presidential GDP Dance Off: Reagan vs. Trump 7-27-24).

There is no bragging about markets when 3.0% is a very good year. Trump hit that level once in 2018 at +3.0% with +2.5% in 2017, 2.5% in 2019, and -2.2% in 2020. That is a +2.66% average across 3 years and +1.45% over 4 years. Biden had a +5.8% year in 2021 followed by +1.9% in 2022 and +2.5% in 2023. That is 3.4% over 3 years. The impact of COVID is a debate on how much of that fed the +5.8%.

We would highlight that Obama had zero 3%+ years and Bush had two 3%+ years at +3.8% in 2004 and +3.5% in 2005. The two terms of Bush were bookended by recessions with the post-TMT bubble and the credit crisis and housing bubble fallout.

As we look back at the 1980s and 1990s (a topic for another day), we see eight 4% years, one 5% year, and a 7% year. We would highlight that Jimmy Carter had a 5% year, a 4% year, and a 3% year since some (like Trump) tend to treat him like a pin cushion based on 1980 and the inflation spike. We highlight that the Carter economy posted three GDP growth years better than Trump’s best year. Partisan voters generally do not like numbers since it forces one to face reality. Who needs that, right? Cuts into your adjective festival.

The above chart updates the running quarterly GDP across time from 1Q21 when Biden took over after the COVID vaccine was in active delivery mode. The Fed had been in ZIRP mode since March 2020 and stayed there until March 2022 when the Fed finally realized inflation was high. For 2021 into early 2022, the markets were booming and bubbling.

Presidential GDP Dance Off: Clinton vs. Trump 7-27-24

Presidential GDP Dance Off: Reagan vs. Trump 7-27-24

GDP 2Q24: Banking a Strong Quarter for Election Season 7-25-24

State Unemployment: A Sum-of-the-Parts BS Detector 6-30-24

1Q24 GDP: Final Cut Moving Parts 6-27-24

Construction Spending: Stalling Sequentially at High Run Rates 6-4-24

1Q24 GDP: Second Estimate, Moving Parts 5-30-24

1Q24 GDP: Looking into the Investment Layers 4-25-24

1Q24: Too Much Drama 4-25-24

4Q23 GDP: Final Cut, Moving Parts 3-28-24

4Q23 GDP: Second Estimate, Moving Parts 2-28-24

GDP and Fixed Investment: Into the Weeds 1-25-24