The BEA revised second-Quarter GDP lower by 0.2 percentage points to 2.1 percent. GDI was 0.5 percent.

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GDP numbers from the BEA, chart by Mish

GDP vs GDI Chart Notes

• Real means inflation adjusted
• GDP is Gross Domestic Product
• GDI is Gross Domestic Income
• Real Final Sales is the bottom line assessment of GDP. It excludes inventories which net to zero over time.

Gross Domestic Product, Second Quarter 2023 (Second Estimate)

• Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2023 , according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.
• Current-dollar personal income increased $232.1 billion in the second quarter, a downward revision of $3.9 billion from the previous estimate.
• Disposable personal income increased $284.5 billion, or 5.9 percent, in the second quarter, an upward revision of $36.3 billion from the previous estimate. Real disposable personal income increased 3.3 percent, an upward revision of 0.8 percentage point.
• Personal saving was $892.3 billion in the second quarter, an upward revision of $22.7 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 4.5 percent in the second quarter, an upward revision of 0.1 percentage point.
• Real gross domestic income (GDI) increased 0.5 percent in the second quarter, in contrast to a decrease of 1.8 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.3 percent in the second quarter, compared with an increase of 0.1 percent in the first quarter

Corporate Profits

• Profits of domestic financial corporations decreased $47.8 billion in the second quarter, compared with a decrease of $9.4 billion in the first quarter.
• Profits of domestic nonfinancial corporations increased $17.1 billion in the second quarter, in contrast to a decrease of $102.9 billion in the first quarter.
• Rest-of-the-world profits increased $20.2 billion in the second quarter, in contrast to a decrease of $9.2 billion in the first quarter.

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Major Discrepancy Between GDP and GDI

GDP and GDI are two measures of the same thing, one from a product perspective, the other from an income perspective. Over time they merge.

The last three quarters of GDP starting with 2022 Q4 are 2.6 percent, 2.0 percent, and 2.1 percent. The last three quarters of GDI starting with 2022 Q4 are -3.3 percent, -1.8 percent, and 0.5 percent.

GDI is still consistent with a recession starting 2022 Q4. GDP isn’t. The NBER, the official arbiter of recessions, averages the two measures. The result is inconclusive for Q4 and Q1 combined.

Don’t be surprised if the NBER declares we had a recession and it is already over. It’s happened before.

Job Openings and Quits are in a Steep Plunge. The Fed Will Be Pleased.

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Meanwhile, please note Job Openings and Quits are in a Steep Plunge. The Fed Will Be Pleased.

And The Labor Leverage Ratio, a Measure of Wage Bargaining Power, Is in Retreat.

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