5 Unique Charts From US 2Q GDP Report by Eric Bush, CFA

US GDP in the second quarter underwhelmed (1.2% QoQ AR vs expectations of 2.4% QoQ AR) thanks to the volatile inventory category. We will let others get into the weeds regarding what may happen with future revisions and instead focus on several charts you will (hopefully) not see anywhere else.

The structural slowdown of US growth has unfortunately hit new lows. The 10-year annualized change in real GDP is just 1.28% (same as it was at the end of the first quarter) and the 10-year annualized change in nominal GDP is just 2.94% (a new low going back to 1956).

US GDP 2Q

US GDP 2Q

Intangible property products share of overall nonresidential gross private business investment has hit an all-time high of 4.1% of GDP. Equipment’s share of business investment has fallen to the lowest percentage of GDP since 4Q2011 (5.7% of GDP). Same thing holds for structures share of business investment (2.6% of GDP).

US GDP 2Q

Real gross private investment in intellectual property products has surpassed $700 billion (SAAR) for the first time. Current real investment in IP is 25% higher than the high watermark in 2008.

US GDP 2Q

And finally, state and local government’s are investing more in R&D than ever before. State and local governments have increased R&D spending to over $20 billion (SAAR) for the first time ever.

US GDP 2Q