US economy grew more slowly in 2nd quarter than previously estimated

Washington: The US economy grew more slowly in the second quarter than previously estimated — a good sign for the Federal Reserve, which is attempting to cool demand to bring down price increases, a media report said.

Gross domestic product, the broadest measure of economic output, rose at an annualised rate of 2.1 per cent in the second quarter, according to the Commerce Department’s second estimate released on Wednesday, CNN reported.

That’s a slightly slower pace than the 2.4 per cent the department initially estimated.

The second estimate factored in greater consumer spending, government outlays and exports, compared to the initial estimate.

Meanwhile, business investment and inventories were revised lower.

Business investment — referred to as nonresidential fixed investment — was revised to a 6.1 per cent rate of growth, compared to a 7.7 per cent rate in the first estimate.

Residential fixed investment, which reflects conditions in the US housing market, had less of a drag on growth than previously estimated, CNN reported.

Economic growth in the second quarter was mostly broad based, but there were some signs of weakened demand for goods purchases and imports. Consumer spending, which accounts for about 70 per cent of economic output, was revised slightly higher in the second estimate, CNN reported.

Economists widely expected the summer to be robust, with Americans spending big on travel, dining and other in-person experiences.