U.S. economy grew by 2.4 percent during second quarter

WASHINGTON D.C. (BNO NEWS) – The U.S. real gross domestic product (GDP), the output of goods and services produced by labor and property increased at an annual rate of 2.4 percent in the second quarter, the Bureau of Economic Analysis (BEA) announced on Friday. In the first quarter, real GDP increased 3.7 percent.

In the Q2 there were some positive contributions from nonresidential fixed investment, exports, personal consumption expenditures, private inventory investment, federal government spending, and residential fixed investment.

The decrease in GDP was caused by the acceleration in imports and a slowdown in private inventory investment that were partly offset by an upturn in residential fixed investment, an acceleration in nonresidential fixed investment, an upturn in state and local government spending, and an acceleration in federal government spending.

The decrease was also a consequence of the reluctance of American citizens to consume as the personal consumption spending rose just 1.6 percent reflecting the high unemployment and overhang of debt. The personal consumption spending is the driver of more than two thirds of economic activity.

President Obama reacted to the news at an event held in a Chrysler plant in Detroit, Michigan. Obama was not pleased by the economic growth but said that the situation was better than it was before.

However, the report contained better news as nonresidential fixed investment rose from 7.8 percent to 17 percent in Q2; nonresidential structures increased 5.2 percent in contrast to a recorded decrease of 17.8 percent in the first quarter; investment on equipment and software continued to increase, from 20.4 to 21.9 percent.

The biggest impact on the economic recovery was the rise of imports. An increase in the imports in the period means a subtraction in the calculation of GDP. Imports rose 28.8 percent in contrast with a 10.3 percent gain in exports. In order to grow, the nation needs exports to rise faster than imports.

(Copyright 2010 by BNO News B.V. All rights reserved. Info: sales@bnonews.com.)

Related posts:

1. U.S. government lowers growth estimate for first quarter to 2.7 percent
2. U.S. economy grew by 2.7 percent in first quarter – government
3. McDonald’s second quarter earnings up 15 percent, global sales up 4.8 percent
4. Amazon.com’s fourth quarter sales surge 42 percent
5. U.S. trade deficit increases 15.1 percent in May