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Second-quarter US economic growth revised up

Second-quarter US economic growth revised up
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US economic growth was a touch higher in the second quarter than previously estimated but remains weak.

The Commerce Department’s final calculation of gross domestic product between April and June was of 1.7 percent annualised growth.

That was because of upward revisions to consumer spending and business inventories.

In the first three months of this year the US economy grew at a much stronger 3.7 percent.

The sharp drop off in GDP in the second quarter was due to a much bigger trade deficit.

US exports to other countries rose 9.1 percent but there was a far larger surge in imports – up by 33.5 percent – as Chinese companies rushing to push through goods before the expiration of value added tax rebates.

Economist calculate the bigger trade gap cut 3.5 percentage points from GDP.

Analysts do not expect the robust import growth pace to continue, which means trade will be less of a drag on growth in the third quarter.

In further signs that the US economy is strengthening, new claims for jobless benefits fell
by 16,000 last week to 453,000.