Exports Boost GDP To Fastest Pace in Year

Washington, DC, Aug. 28. 2008--The economy this spring grew at its fastest pace in nearly a year as exports remained strong and tax rebates helped shoppers at home.

The Commerce Department that gross domestic product increased at a 3.3 percent annual rate in the second quarter. The revised reading was better than the government's initial estimate of a 1.9 percent pace and beat economists' expectations for a 2.7 percent growth rate.

The rebound comes after the economy contracted in the final three months of 2007 and limped into the first quarter at a lackluster 0.9 percent pace. The 3.3 percent growth in the spring was the best performance since the third quarter of last year, when the economy was chugging along at a brisk 4.8 percent pace.

Still, the growth pickup is not likely to be seen as a lasting sign that the fragile economy is back on solid ground.

Federal Reserve Chairman Ben Bernanke recently warned the economy will be weak through the rest of this year. A growing number of analysts fear that the country will hit another economic pothole in the fourth quarter, as the bracing impact of the tax rebates disappears. And there are concerns exports could tail off as other countries' economies slow down.

The biggest factor in the second-quarter's rebound was robust sales of U.S. exports to other countries. The weaker value of the U.S. dollar has bolstered those sales. Exports grew at a 13.2 percent pace in the spring. That was much stronger than the government's initial estimate of a 9.2 percent growth rate, and more than double the 5.1 percent growth rate logged in the first quarter.

Imports, meanwhile, fell at a 7.6 percent annualized pace.

The improved trade picture added 3.1 percentage points to second-quarter GDP, the most since 1980.

U.S. consumers boosted their spending at a 1.7 percent pace in the second quarter. That was slightly better than the 1.5 percent growth rate initially report and marked the best showing in nearly a year.

One of the country's biggest problems -- the housing collapse -- was evident in the GDP report.

Builders cut back at an annual rate of 15.7 percent in the second quarter-- although that was a better showing than early this year and late last year.