GDP for the US Economy Underperformed This Much in the Second Quarter

The U.S. gross domestic product grew at an annual rate of 1.3% during the second quarter, an improvement from the 0.4% gain in the first quarter, but falling short of forecasts. Economists expected a 1.8% increase

During the second quarter, current estimates have GDP around $13.27 trillion, still below its pre-recession highs. Second and third estimates are scheduled for release in August and September as more information becomes available. A big sticking point last quarter was household purchases, which make up about 70% of the economy and only gained 0.1% in the last quarter. And economists don’t expect that number to pick up in the second half.

Durable goods orders plunged 4.4% while the prices of necessities like food (NYSE:RJA) and energy (NYSE:XLE) increased, curtailing spending on non-essential items like new automobiles. Furthermore, unemployment climbed to 9.2% in June, and payrolls grew by 18,000, the smallest gain in nine months.

Exactly What is Gross Domestic Product? Find Out Here.

Friday the Commerce Department also released GDP revisions going as far back as 2003. According to the report, GDP fell 5.1% between the fourth quarter of 2007 and the second quarter of 2009, upwardly revised from the 4.1% drop previously estimated. The only other contraction to the economy to rival that was a 3.7% decline between 1957 and 1958.

More from The Cheat Sheet