The economy grew at a 1.7% pace in 2Q, above consensus expectations of 1.0%, but 1Q growth was revised down to 1.1% from 1.8%. That said, the benchmark revisions showed that the slow growth rate in the first half of the year is off of a stronger base. GDP growth was revised up by 0.6pp in 2012 with robust growth at the beginning of the year. Looking back further, the data were revised to reveal a more shallow recession and stronger recovery, therefore implying a smaller output gap (albeit still historically very large). Inflation was also revised up last year while the saving rate was boosted modestly.
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