Today, the Bureau of Economic Analysis (BEA) released their second installment of the Q2 2007 GDP report showing higher than expected growth of 4.0%, buoyed by strength in nonresidential structures and federal, state and local government spending, a decline in imports while continuing to be weighed down by weakness to fixed residential investment.
It’s important to keep in mind that today’s results are still preliminary and will not be finalized until the next installment.
Residential fixed investment, that is, all investment made to construct or improve new and existing residential structures including multi–family units, continued its historic fall-off registering a decline of 11.6% since last quarter while shaving .61% from overall GDP.
Housing continues to be, by far, the most substantial single drag on GDP subtracting an amount roughly equivalent to the contributions made by all exports of goods during the quarter.
The following chart shows real residential and non-residential fixed investment versus overall GDP since Q1 2003 (click for larger version).
