US: 2nd quarter US economic contraction unrevised at 1.0 pct
Fri Aug 28 01:06:50 EST 2009
Thu Aug 27 15:06:50 UTC 2009
WASHINGTON, Aug 27 AFP - The US economy shrank at a 1.0 per cent annual pace in the second quarter, the government said on Thursday, leaving unrevised an estimate from a month earlier.
The figure for gross domestic product was better than expected by analysts, who had forecast a revision showing a 1.5 per cent pace of decline for the recession-bound economy.
The Commerce Department figures showed an easing of the deep recession that led to a 6.4 per cent pace of decline in the first quarter.
The revision showed a drop of 1.0 per cent in consumer spending, the main driver of economic activity, instead of the prior estimate of a 1.2 per cent decline.
Motor vehicle output added 0.20 percentage points to the GDP after subtracting 1.69 percentage points from the first-quarter change.
Federal government spending increased 11.0 per cent in the second quarter, in contrast to a decrease of 4.3 per cent in the first.
The housing sector remained a drag on the economy, with real residential fixed investment falling 22.8 per cent, compared with a decrease of 38.2 per cent in the prior quarter.
Exports fell 5.0 per cent while imports decreased 15.1 per cent -- a phenomenon that contributes to GDP because it means more production is domestic based.
A big drawdown in inventories subtracted from growth, although economists say this opens the way for increased activity because businesses will need to rebuild stockpiles.
The change in inventories subtracted 1.39 percentage points from second-quarter GDP, after taking away 2.36 percentage points in the first quarter.
Real final sales of domestic product -- a key reading of economic activity that strips out inventory adjustments -- showed a 0.4 per cent drop in the second quarter, revised from last month's estimate of a 0.2 per cent decline.
"The second quarter figure reflected selling off of inventory and sharply declining residential and non-residential investment, as well as lower personal consumption expenditures and exports," said Ed Friedman at Moody's Economy.com.
"Partial offsets were contributions from government spending at all levels."
