July 31, 2009

U.S. GDP beats expectations

The U.S. gross domestic product fell 1 percent in the second quarter beating expectations soundly, the Bureau of Economic Analysis reported Friday.

The figure, the broadest measure of U.S. economic activity, fell as expected, showing the economy was still in a slump. But the 1 percent drop beat expectations by 0.4 percentage points and seemed a far cry from the 6.4 percent drop in the first quarter of the year.

Even automobiles contributed, adding 0.2 percentage points to the second quarter figure, which is an advanced projection and subject to revisions in the next two months.

Still, the automobile sector showed a rebound after subtracting 1.69 percentage points from the first quarter GDP.

Going in in the opposite direction, computer sales slumped, taking away 0.04 percentage points April through June after adding 0.5 percentage points in the first quarter.

Consumer spending, a major portion of the economy, fell in the recent quarter, down 1.2 percent at an annualized rate.

The government said consumer prices for domestic purchases rose 0.7 percent in the quarter after dropping 1.4 percent in January through March.