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Summary:

The economy grew 1.2% in the second quarter according to the advanced Bureau of Economic Analysis report. On a year-over-year basis the economy grew 1.2%. The recovery since 2009 remains historically slow with no year of GDP growth above 3%. Growth in the last three quarters has been disappointing with first quarter growth of 0.8% following 0.9% growth in the fourth quarter of 2015. Consumer spending remained strong in the second quarter but other components slumped. The drop in investment was driven by a strong dollar, low energy prices, and falling corporate profits. Investment in inventories fell as part of a correction cycle. Second quarter real final sales to domestic purchasers (GDP minus inventories and net exports) rose 2.1% at an annual rate in the second quarter.