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The BEA reported that final U.S. GDP growth for Q2 2007 was still a robust 3.8%. This was a slight revision downwards from the preliminary GDP forecast of 4% released a month ago. The revision was due to updated information that showed final import figures were a little higher than estimated last month.

Q2 GDP growth of 3.8% was quite a jump from Q1 GDP growth of only .6%. The last time GDP was that low was in Q1 2003, the tail-end of the last recession. (Source: GDP News Release)

What It Means to You

This report means that the U.S. economy produced about the same as it did in Q1 2006. A healthy growth rate is about 2-3%. It seems surprising that GDP should jump so dramatically, especially since housing, which comprises 10% of the economy, is continuing to decline.

However, the positive Durable Goods Reports are also predicting a recovery in the economy. Watch for the Employment Report, due October 7, to see if it also reflects a strengthening economy.

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