Higher Q2 GDP Estimate To 1.7% Not Enough To Ease Fears

The U.S. economy grew at a faster pace than originally thought in the second quarter, still an indication that the country’s momentum slowed.

Gross domestic product expanded by 1.7%, greater than the original estimate of 1.5% growth, new Labor Department data shows. The increase in GDP was driven most by exports, but weakened by a fall in investments by U.S. businesses.

“The revised GDP report shows weakness, which looks good only because it is quite a bit better than the lousy report which came a month before,” says FTN Financial economist Chris Low. Looking ahead, Low says, consumer spending will likely stay tepid. “On balance then, more so-so growth,” he says.

The latest figures also showed that after-tax corporate profits unexpectedly rose by 1.1%. This comes after a large 8.6% drop in the first quarter, mainly the result of an expiring tax credit.

Read Full Article from Forbes

- Posted: 2012-08-29 15:27:02

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