Today, the Bureau of Economic Analysis (BEA) released their third and final installment of the Q2 2008 GDP report showing better than expected growth at an annual rate of 2.8%.Looking at the report more closely though it appears that much of the growth was fueled by unusually large increases in exports, unusually large decrease in imports (inverse… declining exports adds to GDP), an unusually large increase in disposable personal income (likely fueled by the tax rebate checks) and fairly strong government consumption expenditures.
Still, fixed investment, both residential and non-residential continued to come under pressure with residential investment declining 13.3% and non-residential experiencing only tepid growth of 2.8% weighed down by a 5.0% decline in equipment and software.
The following chart shows real residential and non-residential fixed investment versus overall GDP since Q1 2003 (click for larger version).
