GDP Growth Slows
Today, the Bureau of Economic Analysis reported that the U.S. economy grew at a 1.6 percent annual pace in the second quarter. The report was a second analysis, revising the number down from an initial estimate of 2.4 percent. That is a dismally slow pace of growth, but better than economists expected. Economic data has been almost uniformly negative for the past two months, and some predicted a rate of growth as low as 1 percent. In the first quarter, GDP grew at a 3.7 percent pace; last year, the pace clocked in at 5 percent.
The Bureau of Economic Analysis knocked 0.8 percentage point, about $25 billion, off of the GDP figure to account for an upward revision to imports and a downward revision to exports and private inventory investments — essentially, business restocked and rebuilt a bit less than the government first guessed.
The numbers give context for a major speech by Ben Bernanke, the head of the Federal Reserve, at 10 a.m. Speaking at a conference, Bernanke might outline new policy measures by the Fed to gin up recovery. The slow pace of GDP growth implies a strong stall-out and poor job growth for the remainder of the year.