Tuesday, September 29, 2009
Second quarter GDP revised, saving ratio up
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

Gross domestic product fell by 0.6% in the second quarter, from a previous estimate of 0.7% and an initial 0.8%, so the revisions are heading in the right direction. The change was expected following new estimates of construction output. More revisions can be expected in the coming months. As things stand, the figures show the GDP fall over 12 months to be 5.5%.

There is a wealth of information in these quarterly national accounts. One highlight is what was happening to the personal sector. Real personal disposable income rose by a healthy 0.9% in the second quarter, while household expenditure overall dropped by 0.6%. The saving ratio rose, as expected, from an upward-revised 3.9% in the first quarter to 5.6% in the second. Last year it averaged only 1.7%. The household sector has adjusted a lot. More details here.