Quarterly GDP Rose 4%, But Consumers, Housing May Weigh on Economy
WASHINGTON -- The US economy grew at a much faster pace in the second quarter than previously estimated, but tepid consumer spending, weakening housing activity and credit-market turmoil suggest growth will slow significantly into next year.
The nation's gross domestic product, the value of all goods and services produced in the economy, expanded at a 4% annual rate in the second quarter, the Commerce Department said yesterday. That was up from a previous estimate of 3.4%, largely because exports and business investment during the period were stronger than previously thought.
The second-quarter improvement was expected, but has been overshadowed by August's volatility in credit markets. Analysts are forecasting that economic growth will be between 2% and 3% in the current quarter before softening further.
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