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(CEP News) - The advance U.S. GDP report came in lower than expected for the second quarter of 2008, rising by 1.9% against expectations of 2.3% growth, according to the Bureau of Economic Analysis on Thursday. Revisions showed the U.S. economy shrank 0.2% in the fourth quarter 2007.
Revisions also showed the first quarter grew at 0.9%, down one-tenth from a previously reported 1.0% growth. Prior to the release, forecasts were abnormally varied for the report, ranging from 0.9% to 4.2%. The increase in real Q2 GDP reflected positive contributions from exports, personal consumption expenditures (PCE), nonresidential structures, federal government spending, and state and local government spending. Negative contributions included private inventory investment, residential fixed investment, and equipment and software. Imports, which are calculated as a subtraction to GDP, decreased. The price index for GDP, which measures prices paid by U.S. residents, rose 4.2% in the quarter, compared with an increase of 3.5% in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 2.2% in the second quarter, the same as in the first quarter. Real personal consumption expenditures increased 1.5% in the quarter, compared with an increase of 0.9% in the first. Durable goods decreased 3.0%, compared with a decrease of 4.3% in Q1. Nondurable goods increased 4.0%, in contrast to a decrease of 0.4%, while services increased 1.1%, compared with an increase of 2.4% in the prior quarter. Real gross domestic product is the output of goods and services produced by labour and property located in the United States. The 1.9% growth represents growth from the first quarter to the second quarter. The second quarter "preliminary" estimates, based on more comprehensive data, will be released on Aug. 28, 2008. By Patrick McGee,
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, edited by Nancy Girgis,
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