Third revision of GDP...DOWNWARD!Submitted by SteveMT on Fri, 06/25/2010 - 14:05
The truth is out there, Neo.
US growth revised downwards
The US economy grew at a slightly slower pace than first predicted as consumer and business spending fell.
By James Quinn
Published: 6:05PM BST 25 Jun 2010
In its third revision of the gross domestic product (GDP) figure for the first three months of 2010, the US Commerce Department said the annualised rate of growth was 2.7pc.
The reading was below the 3.2pc estimated in April, and the 3pc figure given last month. It came two days after the Federal Reserve warned of slowing growth in the face of European debt.
The breakdown of the GDP number showed that business spending slowed from an earlier estimate of 3.1pc to 2.2pc, while growth in consumer spending fell to 3pc – down on the earlier 3.5pc pace predicted. Consumer spending is key as it accounts for approximately two-thirds of US GDP.
Nariman Behravesh, chief economist at IHS Global Insight, said the downward revision was to be expected. "Despite the small downward revision in the Q1 growth numbers, [we] expect second-quarter growth to be in the 3.5pc to 4pc range.
"After that, we expect a loss in growth momentum, with second-half growth in the 2.5pc to 3pc range," he said. A separate report from Thomson Reuters and the University of Michigan found consumer sentiment to be at its highest level since January 2008.