The third estimate of 2Q2014 GDP comes in at 4.6%, up from 4.2% a month earlier, mostly on revisions to exports and nonresidential fixed investment. Subtract 1.4 points for inventories and you've basically got 3.2%. Not too shabby but not gangbusters like it ought to be at this stage of the game.
Recall, however, that the export picture in 2Q reflects a dollar index trading in the range of 79, whereas the index has been on a tear since mid-July, marching upward beyond 85 today thus making exports very pricey in 3Q compared to then, portending rough news ahead on that front. Exports of goods are running at about $1.6 trillion nominal annualized in 2Q vs. $1.5 trillion a year ago. Imports of goods, however, which subtract from GDP, still swamp our exports by $800 billion net annually and are also up $100 billion year over year at $2.4 trillion nominal annualized in 2Q. To put that $800 billion in context, consider that total nominal GDP year over year is up only $700 billion. Think what we could be if we were an export powerhouse once again.
