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.
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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.