News Column

US Second Quarter Economic Growth Revised Downward

September 27, 2012

The US economy grew less than previously estimated - at an annual rate of 1.3 per cent - in the second quarter, according to a final figure issued Thursday by the US Commerce Department.

The third estimate for the April-June period lowered gross domestic product (GDP) growth from the August estimate of 1.7 per cent.

First quarter growth was 2 per cent, following a rate of 4 per cent in the last quarter of 2011.

In response to the slowing growth, which has left unemployment above 8 per cent, the rate-setting Federal Reserve announced on September 13 that it plans to buy up to 40 billion dollars in long-term securities every month, to support the still-shattered housing market.

The government's preliminary estimate in July put second quarter growth at an annual rate of 1.5 per cent.

The final estimate is based on more complete data.

The revision reflects consumer spending that was lower than first estimated, as well as smaller increases in business investment and housing construction.

Farm inventories were also revised lower, due to a drought that has lowered production across much of the United States. The drought is expected to weigh on GDP for the July-September quarter, too.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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