U.S. GDP update shows 2Q improvement
The U.S. economy, buoyed by government stimulus spending, shrank 0.7 percent in the second quarter, according to the latest revised estimate by the U.S. Department of Commerce.
The productivity number, based on more complete data, is better than the previous figure that showed the economy declined 1 percent from April through June. It is a huge improvement from the 6.4 percent drop in output during the first quarter, further indicating that the recession may be coming to an end.
A recession is defined as two consecutive quarters of negative growth, but experts are divided on how quickly the economy will be able to gain back wealth lost during the past 18 months.
The decrease in gross domestic product was influenced by contractions in private inventory investment, personal consumption, exports and real estate investment, according to the Bureau of Economic Analysis. The revised second quarter estimate reflected smaller decreases in exports and commercial real estate investment and an upturn in federal, state and local stimulus spending, it said.
Real exports of goods and services decreased 4.1 percent in the second quarter, compared with a 29.9 percent decrease in the first quarter. Real imports decreased 14.7 percent compared with a decrease of 36.4 percent in the first three months.
Consumer spending contracted 0.9 percent.