Wall Street appears to have been caught off-guard by an upward revision to electricity and natural gas usage figures, which led to an increase in real personal consumption to 2% from the 1.6% initially projected.
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The quarter was marked by a big jump in business spending as companies replenished equipment they hadn’t replaced during the recession, with business fixed investment rising 17.6%.
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Contributing to the slowdown from the first quarter was the country’s trade ledger: exports rose 9.1%, but imports grew a startling 32.4%, the biggest jump since the first quarter of 1984. Imports took away 4.45 percentage points from GDP in the second quarter.
Do not get fixated on making the numbers improve. An increase in imports is good news. It shows more domestic economic activity: more consumption and investment. Trying to reduce imports will likely result in worse economic performance.