Revised U.S. GDP Rises to 1.7% Growth in Q2; Consumers Opt to Save More
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Revised data from the U.S. Commerce Department today shows the economy expanded at a slightly faster pace in the second-quarter than originally estimated.
Gross domestic product (GDP) expanded at an annual rate of 1.7 percent for the three-months ended June 30, 2012. The number was up 0.2 points from the initial Commerce Department estimate, although it was in-line with economists expectations.
Despite the tick higher, many still see the broader picture as "glum." Second-quarter GDP was a slowdown from 2 percent growth in the first-quarter, which was also a slowdown from the prior quarters reading.
Consumer spending rose to a 1.7 percent annual rate, from 1.5 percent prior reading and 2.4 percent in the first quarter. Purchasing power slipped 0.6 points to 3.1 percent, while the savings rate rose 0.4 points to 4 percent.
In terms of corporate profits, the Commerce Department said profit from current production rose $10.4 billion, from a decrease of $53 billion in the first quarter. Corporate spending on equipment and software rose 4.7 percent, its slowest pace since the third-quarter of 2009.
The continued sluggishness of the economy could prompt the Fed to take further easing action sooner than expected. Investors and traders will be keeping an eye on comments from Fed chair Ben Bernanke, who will be attending the Jackson Hole conference over the weekend. Bernanke recently scribed a letter to House Oversight and Government Reform Committee chair Darrell Issa, saying he sees scope for further action on behalf of the Fed.
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Gross domestic product (GDP) expanded at an annual rate of 1.7 percent for the three-months ended June 30, 2012. The number was up 0.2 points from the initial Commerce Department estimate, although it was in-line with economists expectations.
Despite the tick higher, many still see the broader picture as "glum." Second-quarter GDP was a slowdown from 2 percent growth in the first-quarter, which was also a slowdown from the prior quarters reading.
Consumer spending rose to a 1.7 percent annual rate, from 1.5 percent prior reading and 2.4 percent in the first quarter. Purchasing power slipped 0.6 points to 3.1 percent, while the savings rate rose 0.4 points to 4 percent.
In terms of corporate profits, the Commerce Department said profit from current production rose $10.4 billion, from a decrease of $53 billion in the first quarter. Corporate spending on equipment and software rose 4.7 percent, its slowest pace since the third-quarter of 2009.
The continued sluggishness of the economy could prompt the Fed to take further easing action sooner than expected. Investors and traders will be keeping an eye on comments from Fed chair Ben Bernanke, who will be attending the Jackson Hole conference over the weekend. Bernanke recently scribed a letter to House Oversight and Government Reform Committee chair Darrell Issa, saying he sees scope for further action on behalf of the Fed.
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