Bloomberg Surveillance · Wednesday, August 26, 2026
The second look at second-quarter GDP revealed a nominal GDP growth rate of 7.9% annualized, a figure described as unprecedented by analysts. This strong nominal GDP growth is attributed to a combination of factors including AI Capex and government reshoring/defense spending, contributing to an economy operating above trend.
“I'm looking at a screen, and I don't have the statistic in front of me, but it's still a boom economy, Michael Ball, on nominal GDP.”
“Nominal GDP ending second quarter, first look, an annualized rate of 7.9%. I have never perceived that in my academic life. I've never witnessed it.”
“And that's something I get out of Southeast Asia, you know, given a war going on.”
“So the fiscal pulse has been quite strong. That's expected to fade into year end, but that's clearly reflected in Q2 data. And again, the momentum right now is pretty strong. So we are looking at an economy that is above trend. And that is a problem for the Fed, given that inflation remains stickier in that kind of backdrop.”