GDP Revised Down to 1.6 Percent

By August 27, 2010Economy

Today, the Commerce Department revised second quarter GDP growth down to 1.6 percent (seasonally-adjusted annual rate) from last month’s advanced estimate of 2.4 percent.

The large trade deficit reported in June was not included in the advanced report and was the main cause for the downward revision. This report elevates concerns that the economic recovery is decelerating faster than previously thought. In addition, more than a third (36 percent) of the growth in the second quarter came from a 27 percent surge in residential investment driven primarily by the end of the homebuyer tax credit in April. This signals that the underlying strength of the economy is even less than today’s already-anemic report shows.  Today’s revised reports show no significant changes in the manufacturing numbers.  However, with the recent reports of slower economic activity in July and August, it appears that a further deceleration is in store for the third quarter.

Join the discussion 2 Comments

  • will brennan says:

    The June trade deficit widened in the month of June and was driven by a 1.60% decline in U.S. real exports and a eye-popping 4.75% increase in U.S. real imports. Expect manufacturing to face accelerated weakening in Q3. But I don’t see it as a result of China. It’s worldwide diminished demand.


  • Karl says:

    YAY, all our trade deals are finally working! Most favored nation for China seems to be working out very well too.

    U.S. Trade SURPLUS 1975- 12.4 MILLION
    U.S. trade deficit 2009- oh maybe 800 BILLION OR SO.

    Way to go US Chamber and NAM! Keep up the good work fellas.

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