The US economy grew more slowly in the second quarter than first thought amid shrinking corporate profits and higher imports, the government reported today.
US gross domestic product - which measures total output within the nation's borders - expanded at a 2.8 per cent annual rate in the second quarter, down from the 3 per cent pace estimated in the Commerce Department's first snapshot last month.
The revised growth figure, which matched Wall Street expectations, represented a sharp slowdown from the 4.5 per cent clip logged in the first three months of the year and was the slowest rate of advance since the first quarter of 2003.
US Treasury bond prices trimmed early gains, while the dollar initially rose on the news. Analysts said there were few surprises in the report and that the market had already shifted focus to signs of slightly better growth in the third quarter.
The department said after-tax profits fell 1.2 per cent in the April-June period compared with the first quarter. That too was the weakest performance since the first quarter of 2003, when corporate profits tumbled 4.5 per cent.
The GDP report confirmed inflation pressures were tame in the quarter, with two closely watched price measures scaled back slightly from initial estimates.
The core price index for consumer spending - a favourite of Federal Reserve Chairman Alan Greenspan that cuts out volatile food and energy prices - gained at an annual rate of 1.7 per cent, a downward revision from an originally reported 1.8 per cent pace.
Overall, prices rose at a 3.2 per cent annual rate, a notch below the first quarter's 3.3 per cent pace and the initial estimate for the second quarter.