By Dees Stribling, Contributing Editor<\/i><\/p>\n
The Bureau of Economic Analysis reported its revised, or \u201csecond,\u201d estimate for Q2 2014 real U.S. gross domestic product growth on Thursday, finding that GDP expanded at an annualized rate of 4.2 percent. The BEA had previously estimated an annualized increase of 4 percent; a find estimate will be released near the end of September.<\/p>\n
The new estimate is based on more complete source data, the BEA says, but the overall picture is about the same. The increase in nonresidential fixed investment (mostly commercial real estate) was larger than previously estimated, while the increase in private inventory investment (businesses buying needful things) was smaller than previously estimated.<\/p>\n
In the first quarter, real GDP decreased 2.1 percent, in part because of the hard winter. Most of the sectors measured by the BEA bounced back strongly in the second quarter, including upturns in exports and in private inventory investment, accelerations in personal consumption expenditures\u2014people out buying things\u2014and in nonresidential fixed investment. There were also increases in state and local government spending and in residential fixed investment. Imports, a subtraction from GDP, were also up, however.<\/p>\n
Banks doing better<\/b><\/p>\n
U.S. commercial banks and other savings institutes reported aggregate net income of $40.2 billion in the second quarter of 2014, up 5.3 percent ($2 billion) from the same quarter a year earlier, according to the FDIC on Thursday. The increase in earnings was mainly because of a decline in loan-loss provisions and a drop in noninterest expenses. Also, strong loan growth contributed to an increase in net interest income compared to a year ago.<\/p>\n
\u201cWe saw further improvement in the banking industry during the second quarter,\u201d FDIC chairman Martin J. Gruenberg notes. \u201cNet income was up, asset quality improved, loan balances grew at their fastest pace since 2007, and loan growth was broad-based across institutions and loan types.\u201d But he also asserts that industry revenue has been under pressure from narrow net interest margins and lower mortgage-related income, and banks have been increasing higher-risk loans to leveraged commercial borrowers.<\/p>\n
The FDIC also reported the number of problem banks declined for the quarter. The number of banks on the agency\u2019s \u201cproblem list\u201d\u2014whose identities are withheld, for obvious reasons\u2014dropped from 411 to 354 during the quarter. The number of \u201cproblem\u201d banks now is well below the post-crisis high of 888 during the first quarter of 2011. Seven FDIC-insured institutions failed in the second quarter, compared to 12 in the second quarter of 2013.<\/p>\n
Unemployment claims drop<\/b><\/p>\n
For the week ending August 23, initial unemployment claims were 298,000, a decrease of 1,000 from the previous week, the U.S. Department of Labor reported on Thursday. The four-week moving average was 299,750, a decrease of 1,250 from the previous week.<\/p>\n
Wall Street had a down day on Thursday, despite the positive report on GDP. The Dow Jones Industrial Average lost 42.44 points, or 0.25 percent, while the S&P 500 and the Nasdaq dropped 0.17 percent and 0.26 percent, respectively.<\/p>\n","protected":false},"excerpt":{"rendered":"
Revised GDP numbers show an improved annualized rate, while the FDIC reports that bank net incomes are up. The Department of Labor also reports that unemployment claims dropped for the week ending Aug. 23. <\/p>\n","protected":false},"author":1023,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742],"tags":[],"class_list":["post-1004103030","post","type-post","status-publish","format-standard","hentry","category-latest"],"acf":[],"yoast_head":"\n