US economic growth was a touch weaker in the second quarter than first thought, the government said today, as consumers spent less than estimated and businesses built inventories slightly.
US gross domestic product, a measure of all goods and services produced within US borders, grew at a revised 3.3 per cent annual rate in the April-June period after a 3.8 per cent first-quarter increase, the Commerce Department said.
In its first snapshot a month ago, the department had put second-quarter growth at a 3.4 per cent pace, a figure economists had expected to be nudged up to 3.5 per cent.
The revised figures showed consumer spending advanced at a solid 3 per cent pace, a bit softer than the 3.3 per cent rise first reported. Business investment spending was also a bit weaker, although it still climbed at a healthy 8.4 per cent rate. In addition, a small rise in imports helped meet business and consumer demand.
A month ago the department said imports, which subtract from domestic growth, had fallen. Exports, however, were somewhat stronger than first thought, as was government spending - factors that helped temper what would otherwise have been a larger downward revision to economic growth.
Overall, the report did little to alter the view of the economic landscape, as strong demand left inventories lean, laying the groundwork for further production gains. Economists widely expect the economy to gain steam in the second half of the year, although some have ratcheted back forecasts for third-quarter growth slightly in the wake of Hurricane Katrina.
While analysts say much of the storm's impact on economic growth should prove fleeting as activity picks up amid rebuilding, they warn that uncertainties over how high oil and gasoline prices might soar present a wildcard in the outlook.