U.S. Economy: Q2 Software Industry Macroeconomics

This excerpt is from our complimentary Q2 2012 Software Industry Financial Report which can be downloaded here:  http://www.softwareequity.com/research_reports.aspx

We begin with a brief synopsis of U.S. Gross Domestic Product (GDP) performance based upon the most recent data available. GDP is best defined as the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

The Bureau of Economic Analysis (BEA) issued its first estimate of U.S. GDP for the second quarter of 2012, indicating the U.S. economy continues to decelerate. After four consecutive quarters of accelerating growth in 2011, this year has been marred by sequential deceleration in Q1 and Q2 (Figure 1). The second quarter’s lackluster growth rate of 1.5% reflected a sharp decline in consumer spending, which fell from 2.4% in Q1 to 1.5% in Q2, as well as the fragile state of the U.S. and global economies. There was some good news for the software industry, as equipment and software purchases increased 7.2%, compared to Q1’s 5.4%.

A June employment report released by the U.S. Bureau of Labor Statistics confirmed the job market remains weak. After three consecutive quarters of slow but steady improvement, the U.S. unemployment rate remained unchanged at 8.2%.

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