The United States economy grew slightly more than previously reported in the second quarter, helped by consumer spending and export growth that was stronger than earlier estimated, according to a government report on Thursday that pointed to slow growth rather than a recession.
The nation’s gross domestic product grew at an annual rate of 1.3 percent, the Commerce Department said in its third and final estimate for the quarter, up from the previously estimated 1.0 percent.
The revision was a touch above economists’ expectations for a 1.2 percent pace and took G.D.P. growth back to the government’s original estimate of 1.3 percent. The economy expanded at a 0.4 percent rate in the first three months of the year.
Separately, new claims for jobless benefits fell sharply last week to their lowest level since April, although a Labor Department official said government statisticians had problems seasonally adjusting the data.
Applications for unemployment benefits fell by 37,000 to a seasonally adjusted level of 391,000 claims in the week that ended Sept. 24, down from an upwardly revised 428,000 the prior week, the Labor Department said on Thursday.
Analysts polled by Reuters had expected new claims to total 420,000 last week.
The Commerce Department report also showed that while the expenditure side of the economy showed severe weakness in the first half of the year, economic activity as measured by income fared a little better. Gross domestic income rose at a 1.3 percent rate in the second quarter after increasing 2.4 percent in the first quarter.
After-tax corporate profits rose at a 4.3 percent rate in the second quarter, the largest increase in a year, instead of 4.1 percent. Profit ticked up 0.1 percent in the first quarter.
Political haggling in Washington over budget policy and a deepening debt crisis in Europe have eroded confidence, leaving the American economy on the brink of a new recession.
There is cautious optimism the economy will skirt another downturn as factory output continues to expand, although at a slower pace than earlier in the recovery, and businesses maintain their appetite for spending on capital goods.
Details of the G.D.P. revisions also were consistent with an economy that is on a slow growth track rather than sliding back into recession.
Consumer spending growth was revised up to a 0.7 percent rate from 0.4 percent. The increase in spending, which accounts for more than two-thirds of economic activity, was still the smallest since the fourth quarter of 2009.
Export growth was stronger than previously estimated, rising at a 3.6 percent rate instead of 3.1 percent. Imports increased at a 1.4 percent rate rather than 1.9 percent.
That left a smaller trade deficit, and trade contributed 0.24 percentage point to G.D.P. growth.
Businesses accumulated less stock than previously estimated in the quarter, which should support growth in the July-September quarter. Business inventories increased $39.1 billion instead of $40.6 billion, cutting 0.28 percentage point from G.D.P. growth during the quarter.
Excluding inventories, the economy grew at a 1.6 percent pace instead of 1.2 percent.
Business spending was revised to a 10.3 percent rate from 9.9 percent rate as investment in nonresidential structures offset a slight slowdown in outlays in equipment and software. Spending on nonresidential structures was the fastest since the third quarter of 2007.
The G.D.P. report also showed inflation pressures remaining elevated during the quarter, with the personal consumption expenditures price index, or P.C.E., rising at a revised 3.3 percent rate. That compared to 3.9 percent in the first quarter.
The core P.C.E. index, which is closely watched by the Federal Reserve, advanced at a 2.3 percent rate, the largest increase since the second quarter of 2008. It was revised up from 2.2 percent.
Article source: http://feeds.nytimes.com/click.phdo?i=83ffb160900bef41691f1817bf249a42
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