Planet Money
9:32 am
Fri July 27, 2012

The U.S. GDP, Sliced And Diced In Two Graphics

Originally published on Sun July 29, 2012 3:31 pm

No surprise: The economy grew only sluggishly in April, May and June. The U.S. Commerce Department says gross domestic product — the sum of all goods and services produced in the country — grew by just 1.5 percent in the second quarter.

Below, we look at a snapshot of those goods and services — what Americans produced and did during the quarter. But today's release also tells us more: what activity has been helping the economy, and what's been hurting, as well as some new insight into economic activity in recent years.

The gist for last quarter: Consumer consumption continued to grow, but more slowly than in recent quarters. Government spending shrank again, though a little less rapidly than has been the case of late. And growth in private investment — construction, capital equipment and the like — picked up pace a little.

First, here's that snapshot, using numbers fresh off the Commerce Department's presses. (For more detail on what's in each major category, check out a summary from Jay Kaplan at the University of Colorado Boulder.)

Another way to look at GDP is to look at what changed since the last report. In other words, what's working in the economy, and what isn't?

By that measure, consumer spending grew 1.5 percent, the same as growth overall — as the chart shows, consumers make up a huge part of the economy.

That's slower quarter-to-quarter growth than we've seen since the same time last year. And spending on durable goods — stuff that lasts and tends to have higher price-tags, like cars and washing machines — actually fell, by 1 percent.

Other areas showed some brighter numbers. Private investment — companies buying new equipment, residential or commercial construction, and so on — grew by 8.5 percent during the quarter. That's a little better than last quarter, but still not great. One of the bigger drivers: residential construction, which grew by 9.7 percent.

Government spending remained a soft spot, with state and local spending falling by 2.1 percent — no surprise given the serious budget problems those governments are having. Federal spending also declined, by 0.4 percent.

It marked the 10th consecutive quarter of slower state and local spending, and the fourth quarter in a row for federal spending.

The Commerce Department's release also included its customary annual revisions for past year, as it absorbs additional data that becomes available over time.

Overall, growth from 2008 through 2011 was a little slower than previously thought: 0.3 percent a year beyond inflation, on average, down from an earlier measurement of 0.4 percent. That's still pretty sluggish.

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