Economic activity in the U.S. increased at an unrevised rate in the second quarter, according to the Commerce Department's final estimate on gross domestic product in the quarter.
The Commerce Department said GDP increased by 2.5 percent in the second quarter, unchanged from the previous estimate. Economists had expected the pace of growth to be upwardly revised to 2.6 percent.
The pace of GDP growth in the second quarter still represents a notable acceleration from the 1.1 percent growth reported for the first quarter.
Rob Carnell, chief international economist at ING, said, "Expectations had been for a very small increase in GDP, but not much, and one that would not have made a substantial difference to the debate about the timing of the taper."
The Commerce Department said that the unrevised reading on GDP growth came as downward revisions to private inventory investment and exports were offset by an upward revision to state and local government spending.
The report showed that consumer spending increase by an unrevised 1.8 percent in the second quarter, still reflecting a slowdown from the 2.3 percent growth seen in the first quarter.
The acceleration in the pace of GDP growth compared to the previous quarter primarily reflected upturns in exports and non-residential fixed investment, a smaller decrease in federal government spending, and an upturn in state and local government spending, the Commerce Department said.
On the inflation front, the Commerce Department's reading on core consumer prices, which exclude food and energy prices, rose by 0.6 percent in the second quarter.
The growth in core consumer prices, which followed a 1.4 percent increase in the first quarter, reflects a downward revision from the 0.8 percent increase previously reported.
"Nominal GDP was actually revised lower as the inflation deflator was weaker than expected," said Peter Boockvar, chief market analyst at the Lindsey Group. "Regardless, the data is old news as we are just days away from finishing Q3."
by RTT Staff Writer
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