GDP Up 4% in 2Q

Washington, DC, August 30, 2007—Gross domestic product expanded a revised 4% in second quarter, according to the Commerce Department in Washington. It was the fastest pace in more than a year, after growth at a 0.6% pace in the first quarter.

Economists had forecast growth of 4.1%.

A larger increase in exports and smaller gain in imports contributed to a reduction in the trade deficit, with trade contributing 1.4% to growth, the most since 1996.

Commercial construction increased 28%, the most since 1981. Investment in equipment increased at a 4.3% pace, almost double the previous estimate.

Inventories were little changed from the July report.

Declines in residential construction subtracted 0.6% from growth in the second quarter, more than previously estimated.

Consumer spending was revised up to an annual rate of 1.4% from an initial estimate of 1.3%. The gain however was still the smallest in a year.

Corporate earnings for the quarter, adjusted for the value of inventories and depreciation of capital expenditures, rose 6.4%, the most in more than a year, to an annual rate of $1.65 trillion. Compared with a year earlier, profits were up 4.5%.