The U.S. Commerce Department's latest revision of the Gross Domestic Product figures show that the economy expanded at a 5.3 percent annual rate in the second quarter. That's a small uptick from the initial estimate of a 5.2 percent growth rate. The annual rate was 4.8 percent in the first three months of the year.
The latest figures confirm a definite slowing against the runaway 8.3 percent growth rate during the final three months of 1999. The Gross Domestic Product figures reflect the total output of goods and services produced in the United States.
Government analysts said higher borrowing rates, the result of the half dozen interest rate increases by the Federal reserve in the past 14 months, have helped tamp down demand, while non-residential fixed investment, inventory building by businesses, consumer spending and spending on government projects were the principal reasons for the rise.
The Commerce Department said corporate profits rose 3 percent in the second quarter, compared with a 4.8 percent increase in the first quarter. Consumer spending, which accounts for roughly two-thirds of overall economic activity, rose at a 2.9 percent annual rate during the second quarter, a minute drop from the earlier 3 percent government estimate. But spending for durable goods fell at a 5 percent rate, the biggest decline in nearly nine years and reflective of the 12.4 percent drop in orders for durable goods in July.
Among other notable revisions:
- Real final sales, which exclude inventories, rose at a 3.5 percent annual rate in the second quarter; the Commerce Dept. previously reported a 4.2 percent rise.
- Non-residential investment, which includes commercial construction and business equipment and software, rose at a 14.6 percent annual rate in the second quarter, rather than the previous report of a 19.1 percent gain.
- Exports rose at a 13.5 percent rate in the quarter; the previous estimate showed a 7.3 percent gain.
- Government spending rose 4.9 percent in the quarter; the previous report noted a 6 percent increase.