Spring economic growth numbers revised downward

Associated Press
Published: September 26, 2008

WASHINGTON—The economy’s spring rebound turned out to be slightly less energetic than the government previously thought. And, the road ahead is likely to be rocky as the country gets pounded by the worst financial crisis in decades.

The Commerce Department reported today that gross domestic product, or GDP, increased at a 2.8 percent annual rate in the April-June period. That wasn’t as strong as the 3.3 percent growth estimate made a month ago.

But it did mark a pick up after two terrible quarters. The economy barely grew in the first quarter—advancing at a feeble 0.9 percent pace. And, in the final quarter of last year, the economy actually shrank.

Nonetheless, the lower reading for second-quarter GDP surprised economists; they were expecting the government would stick with the 3.3 percent growth estimate.

The main reasons behind the downgrade: consumer spending and U.S. exports didn’t grow as much during the spring as previously thought. Yet export growth was still very brisk, a key factor keeping the economy afloat. And, consumers were helped out by the government’s tax rebates.

GDP measures the value of all goods and services produced within the U.S. and is the best barometer of the country’s economic health.