Washington, September 29—The economy in the second quarter grew more than originally estimated. It was revised higher to a 3.3 percent annual rate from the 2.8 percent previously reported, the Commerce Department said Wednesday
The second revision to real gross domestic product in the April through June quarter was largely due to a decrease in estimated imports, an increase in estimated inventory accumulation, and an increase in estimated exports.
Final sales of domestic product increased 2.5 percent, up from 2.1 percent in the earlier estimate.
Economists were expecting an upward revision to 3.1 percent, according to a survey conducted by CBS MarketWatch.
The government will provide its first estimate of third-quarter growth on Oct. 29. Economists are expecting growth of about 3.7 percent.
In the second quarter's GDP report, inflation measures were unrevised. The core personal consumption expenditure price index increased at a 1.7 percent annual rate in the quarter. The broader gross domestic purchases price index increased 3.5 percent
In current dollars, nominal GDP increased 6.6 percent to $11.66 trillion annualized.
Corporate profits were revised slightly higher. Before-tax profits increased 0.7 percent at a quarterly rate to $1.17 trillion annualized, while after-tax profits fell 0.7 percent. In the past year, before-tax profits are up 19 percent and after-tax profits are up 18.5 percent.
Personal incomes increased 2.4 percent annualized to $9.58 trillion annualized.
As in the earlier estimates, business investment was the biggest source of growth, revised slightly higher to a 12.5 percent increase, including a 14.2 percent gain in investments in equipment and software. Investments in business structures increased 6.9 percent.
Investments in residences soared at a 16.5 percent rate.
Meanwhile, consumer spending slowed to a 1.6 percent rate, the slowest since the depths of the recession in 2001. Spending on durable goods fell 0.3 percent, while spending on services increased 2.7 percent. Spending on nondurable goods increased 0.1 percent.
Net imports subtracted 1.1 percentage points from growth. Imports grew 12.6 percent while exports grew 7.3 percent.
Government spending increased at a 2.2 percent rate, including 2.7 percent in federal spending. Defense spending increased 1.9 percent; nondefense spending increased 4.4 percent. State and local government spending increased 1.9 percent
