US second quarter growth revised down By Financial Tmes reporters Published: August 31 2005 13:43 | Last updated: August 31 2005 13:43
US gross domestic product grew at an annual rate of 3.3 per cent in the second quarter from advance estimates of 3.4 per cent, the commerce department said. GDP grew 3.8 per cent in the first quarter.
Economists had expected second quarter growth to be revised up to 3.7 per cent, although the department said the economy grew at a slower pace in the second quarter primarily because of a downturn in business inventory investment.
Corporate profits in the second quarter increased 17.7 percent from the same quarter a year ago.
The commerce department said consumer spending, business investment, and exports were the largest contributors to economic growth in the second quarter.
Meanwhile, figures from the US Midwest showed business activity in the region fell sharply, contracting for the first time for more than two years as new orders for goods and services fell sharply.
The National Association of Purchasing Management-Chicago business barometer fell from 63.5 in July to 49.2 in August, ending 27 consecutive months of positive readings. Readings below 50 indicate contraction.
The association said production and new orders plummeted while inventories rose. Order backlogs shrank while prices paid accelerated.
The new orders component of the index slid to 46.5 from 69.6 in July. The prices paid component rose to 62.9 from 61.3, while the employment index fell to 51.7 from 56.1 in July.
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