Byline: David M. Dickson, THE WASHINGTON TIMES
The U.S. economy shrank at a much slower pace during the second quarter compared with the previous six months, the Commerce Department confirmed Thursday in its first revision of economic activity during the April-June period.
Gross domestic product (GDP) contracted at an annual rate of just 1 percent during the second quarter, the same pace of decline the government reported last month.
GDP had plunged at annual rates of 5.4 percent in the fourth quarter of last year and 6.4 percent during the first quarter.
The much slower decline in GDP during the spring indicated that the economy was about to emerge from its steepest downturn in seven decades. Economic growth, perhaps as fast as 3 percent, could resume during the current quarter, analysts have been predicting.
GDP has now fallen four quarters in a row for the first time since quarterly data became available in 1947. Cumulatively, the U.S. economy has declined by 3.9 percent, its biggest contraction since the Great Depression.
Corporate profits increased 5.7 percent during the second quarter compared with the January-March period, Commerce also reported. It was the biggest upturn in profits since the first quarter of 2005. Profits, however, were still 10.9 percent below their year-earlier levels.
Most economists expected the Commerce Department to revise the second-quarter decline down to about 1.5 percent because inventories fell more than previously reported. The inventory decline was steeper, but that was offset by other revisions.
Government spending, for example, jumped at a 6.4 percent annual rate. That was faster than the 5.6 percent pace first reported, and it was the fastest rate of increase in more than seven years. Trade activity added 1.6 percentage points to second-quarter growth, more than reported last month. Instead of declining 1. …