2Q23 GDP: Negative Revisions

Bottom Line:  The second reading of 2nd Quarter 2023 GDP showed growth of 2.1% annualized, revised lower by 30 basis points. Nonresidential fixed investment drove the negative revisions, accounting for 20 of the 30 basis points, while inventories flipped from a slight boost to a slight drag. On the consumption side, overall, there was a minor upward revision as the BLS revised down durable goods consumption but reported high nondurable goods consumption. Overall, the report will do little to change the trend and should boost 3Q estimates as the inventory drag will likely flip in the 3rd Quarter. More broadly, the trend in GDP remains towards a modest deceleration amid continued slower growth in consumer services. That said, early estimates for the 3rd Quarter have been surprisingly robust.