Second Quarter Real GDP Revised Up to 2.2% Annual Rate
By TopHolding Editorial · Tuesday, September 29, 2026 at 8:00 PM
First Trust Portfolios reports that the final estimate for second-quarter Real GDP growth was revised upward to a 2.2% annual rate, exceeding prior estimates. This improvement was driven by widespread revisions across major economic categories, particularly personal consumption and business investment, according to the firm's economists.
According to Brian S. Wesbury, Chief Economist, Robert Stein, Deputy Chief Economist, and Nate Gerze, Economist at First Trust Portfolios, the final estimate for second-quarter Real Gross Domestic Product (GDP) growth was revised higher to a 2.2% annual rate. This figure surpassed both the prior estimate and the consensus expectation of 1.5%. Wesbury, Stein, and Gerze note that all major categories saw upward revisions, with personal consumption, inventories, and government spending being the primary contributors. The largest positive impacts on the real GDP growth rate came from personal consumption and business investment, while net exports were identified as the weakest component.
First Trust's economists further observe that the GDP price index was revised lower to a 6.1% annual rate from a previous estimate of 6.4%. Consequently, nominal GDP growth, which combines real GDP and inflation, was revised upward to an 8.5% annualized rate from an earlier 8.0%. For insights into sustainable growth, the report highlights "core" GDP, which excludes volatile elements like government spending, inventories, and trade. Core GDP grew at a 4.6% annual rate in the second quarter, up from a prior estimate of 4.2%, marking its fastest growth rate since 2023. Personal consumption led this growth at a 3.8% rate, followed by a 9.0% annualized increase in business investment, which the economists link to the ongoing data center buildout for artificial intelligence.
The commentary also points out that the domestic firms' reliance on imported chips and equipment for AI development likely contributed to net exports acting as a drag on GDP. Net exports reduced growth by 1.1 percentage points in Q2, representing their third consecutive quarterly drag. Additionally, the report mentions that second-quarter corporate profits showed an 8.9% gain from the first quarter and a 20.8% increase year-over-year. Real Gross Domestic Income, an alternative measure, increased at a 2.6% rate in Q2. Annual revisions by the Bureau of Economic Analysis indicated that average real GDP growth from Q1 2021 through Q1 2026 was 2.84%, a slight increase from the previously reported 2.78%. The second-quarter personal saving rate also saw a significant revision upward to 4.4% from an initial 2.8%.
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Key terms
1. Real Gross Domestic Product (Real GDP): A measure of the total value of goods and services produced in an economy, adjusted for inflation.
2. Nominal GDP: The total value of goods and services produced in an economy, measured at current market prices without adjusting for inflation.
3. Core GDP: An analytical measure used by First Trust Portfolios that excludes more volatile components such as government spending, inventories, and trade to provide a clearer view of underlying economic growth.
Source: Nate Gerze, CFA, Economist; Brian S. Wesbury, Chief Economist; Robert Stein, CFA, Dep. Chief Economist, First Trust Portfolios — Data Watch. Read the original at ftportfolios.com.
