U.S. economy dips at smaller pace in second quarter

WASHINGTON, Sept. 30 (Xinhua) -- The U.S. economy decreased at an annual rate of 0.7 percent in the second quarter of 2009, a better-than-expected performance which provides fresh evidence that the recession was ending, according to the third estimate released by the Commerce Department on Wednesday.

The second quarter's final revision of the real gross domestic product (GDP) -- the output of goods and services produced by labor and property located in the United States -- is a 0.3 percentage point better than the first and second estimates by the department.

It also was better than the annualized 1.1-percent drop that economists had expected.

In the first quarter, real GDP decreased 6.4 percent.

The newly released April-June GDP is based on more complete source data than that was available for the second estimate issued last month. In the second estimate, the decrease in real GDP was 1.0 percent, said the department.

The report said that the drop in real GDP in the second quarter primarily reflected negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, personal consumption expenditures, and exports that were partly offset by positive contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

However, the much smaller decrease in real GDP in the second quarter than in the first primarily reflected much smaller decrease in nonresidential fixed investment and in exports, an upturn in federal government spending, a smaller decrease in private inventory investment, an upturn in state and local government spending, and a smaller decrease in residential fixed investment that were partly offset by a much smaller decrease in imports and a downturn in personal consumption expenditures.