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1. GDP: MISSING THE MARK
• GDP grew at a 6.5% seasonally adjusted annualized rate (SAAR) during Q2 2021, according to advance
estimates from the Commerce Department. The growth is an improvement from the previous quarter’s
6.3% SAAR, but it still underperformed expectations. According to Bloomberg’s latest survey of economists,
the median forecast had expected an 8.4% SAAR. Reasons for the undershoot were declines in residential
investment and inventories as well as declines in federal spending.
• Personal consumption expenditures (PCE) increased a notable 11.8% between Q1 2021 and Q2 2021, led by
spending on accommodation and food services as reopening efforts took place nationwide. Accommodation
and food services made up the most significant contribution to GDP growth of any single category, adding
2.24 percentage points to total GDP growth.
• Evidence points to the beginning of a drawdown in personal savings built up during the pandemic. Personal
savings dropped to $1.97 trillion SAAR in Q2 2021 from over $4 trillion SAAR in the first quarter.