Gross domestic product shrinks 0.5 percent

The third quarter U.S. gross domestic product fell further than previously estimated, dropping 0.5 percent, the Bureau of Economic Analysis said Tuesday.

The previous estimate was a drop of 0.3 percent following second quarter growth of 2.8 percent.

The new estimate for the third quarter is a $7.7 billion decline from the previous estimate.

The latest GDP report includes negative contributions from consumer spending, residential fixed investment and equipment and software, the government said. Gains were noted in federal spending, up 13.6 percent, and slower declines in inventory investments. Export growth slowed to 3.4 percent, while a decrease in imports, at 7.3 percent in the second quarter, decelerated to a decline of 3.2 percent.

Consumer spending, which accounts for two-thirds of the U.S. economy, fell 3.7 percent in the third quarter after gaining 1.2 percent in the second, the government said.

Corporate profits from current production dropped $14.6 billion in the third quarter, while taxes on corporate income fell $9.9 billion after rising $3.9 billion April through June. Before tax profits dropped $50.7 billion in the third quarter, compared with the previous quarter’s drop of $0.9 billion.