GDP beats estimates/Claims data

Q2 GDP growth was 2.8%, above the estimate of 2%. Three tenths of this upside was due to a lower than expected price deflator of 2.3% vs the estimate of 2.6%. Core PCE though of 2.9% was two tenths higher than expected.

On the personal spending side, the biggest chunk, it rose 2.3% vs the estimate of 2%. This follows a 1.5% gain in Q1 and averaging the two together has first half consumption growth at 1.9%. Real final sales grew by 2% vs 1.8% in Q1. Spending on goods rebounded after the Q1 drop while spending on services grew by 2.2% vs 3.3% in Q1.

Gross private investment was the 2nd biggest contributor to GDP, adding almost 150 bps with equipment spending and IP helping out the most. I’m sure AI and AI data center spend are helping to lift these figures. Residential investment was flat.