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3RD LD: U.S. 2nd qtr economic growth at real 1.9%+
(Japan Economic Newswire Via Acquire Media NewsEdge) WASHINGTON, July 31_(Kyodo) _ (EDS: ADDING INFO AT 5-7TH GRAFS)
The U.S. economy grew an annualized real 1.9 percent in the second quarter of 2008, up sharply from 0.9 percent logged in the previous quarter, due to an improvement in the trade balance, the Commerce Department said Thursday.
But revised data newly released by the department showed the U.S. economy contracted 0.2 percent in the October-December quarter of 2007, the first downturn since the July-September period of 2001. The latest figure compared with an earlier estimated rise of 0.6 percent.
The April-June growth was a shade lower than a widely expected expansion of around 2.1 percent in terms of inflation-adjusted real gross domestic product -- the nation's domestic output of goods and services.
The department said in a preliminary report that the growth was bolstered by an acceleration of exports and a retreat in imports. A pickup in consumer spending was also a contributing factor.
Treasury Secretary Henry Paulson said later he expects "moderate" growth in the U.S. economy this year and the troubled housing market to be brought back to stability in a matter of months.
"While our economy faces substantial difficulties that will continue to be a drag on growth in the short term, it is important to remember that our long-term fundamentals are strong," he said in a speech.
"Recognizing the challenges ahead of us, I expect our economy to continue growing this year although at a moderate pace. We are making progress although not in a straight line; housing continues to be at the heart of our economic challenges and remains our most significant downside risk," he said.
The initial GDP figures will be refined twice over the next two months.
The GDP deflator, a closely scrutinized inflation yardstick, gained 1.1 percent in the April-June quarter, down from 2.6 percent the previous quarter and marking the lowest level since the second quarter of 1998, the department said.
Overall personal consumption, which accounts for two-thirds of the nation's economy, rose 1.5 percent, up from the previous quarter's 0.9 percent.
Personal spending on durable goods declined 3.0 percent, smaller than the previous quarter's drop of 4.3 percent, while spending on nondurable goods increased 4.0 percent, compared with the preceding quarter's 0.4 percent fall.
Growth in private investment in nonresidential items such as plants, equipment and software, another key force behind economic expansion, gained 2.3 percent, down from the prior quarter's 2.4 percent growth.
Private residential investment plunged 15.6 percent but staged a steep recovery from the previous quarter's 25.1 percent decline.
Business inventories decreased $95.0 billion, bigger than a $25.6 billion drop the previous quarter, shaving 1.92 percentage points off the second-quarter real GDP change after the 0.02 point pull-down the previous quarter.
Trade in goods and services resulted in an annualized deficit of $737.3 billion, up from $705.7 billion the previous quarter, contributing 2.42 points to the real GDP change, up from the 0.77 point boost the previous quarter.
Copyright ? 2008 Kyodo News International, Inc.
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