The U.S. economy likely expanded at a 1.8 percent annualized rate in the second quarter following a report on June’s advance goods trade balance, the Atlanta Federal Reserve’s GDP Now forecast model showed.
The latest gross domestic product estimate was slower than the 2.3 percent figure calculated on Wednesday, the regional Fed said on its website.
The advance goods trade balance is an early reading of the trade balance of goods plus inventories. It excludes services.
The Atlanta Fed’s outlook on second-quarter GDP had held above 2 percent since its initial reading of 1.8 percent on April 28. It peaked at 2.9 percent and had been in a tight 2.3 to 2.4 percent range.
The government said earlier Thursday its advance figure showed imported goods exceeded goods exported by $63.3 billion last month, compared with a goods trade deficit of $60.59 billion in May.
The Atlanta Fed model showed trade would be a 0.10 percentage point drag on second-quarter GDP compared with an earlier estimate of a 0.17-point contribution.
Inventory investments likely subtracted 0.79 point from second-quarter GDP, more severe than the model’s prior forecast of a 0.63-point drag, the Atlanta Fed said.
The government will release its first reading on second-quarter GDP growth at 8:30 a.m. (1230 GMT) on Friday. Analysts polled by Reuters forecast the U.S. economy likely grew at an annualized 2.6 percent growth rate in the second quarter, faster than the 1.1 percent seen in the first quarter.
Source: Reuters (Reporting by Richard Leong Editing by W Simon and James Dalgleish)