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.