(RTTNews) - U.S. economic growth in the second quarter of 2011 was slower than initially reported, according to figures released Friday by the Commerce Department.
Following the weak gross domestic product growth seen in the first quarter, second quarter GDP increased at an annual rate of 1 percent, according to the report.
Initial figures had put second quarter growth at 1.3 percent, and while most economists had expected a downward revision, the figures came in even lower than the 1.1 percent growth generally predicted.
According to the Commerce Department, the downward revision to GDP growth reflected lower levels of private inventory investment and exports than previously estimated.
The downward revisions were partly offset by upward revisions to non-residential fixed investment and consumer spending.
The increase in non-residential fixed investment came largely in investments in structures, equipment and software, based on newly available data for June.
The upward revision to consumer spending largely came in the financial services and insurance sectors, with health care spending also increasing.
Overall, the 1 percent GDP growth in the second quarter, which proved stronger than the 0.4 percent growth posted in the first quarter, was driven by increases in non-residential investment, exports, consumer spending and federal spending that were partly offset by cuts to state and local government spending and private inventories.
Real personal consumption expenditures increased 0.4 percent in the second quarter compared to a 2.1 percent increase in the first.
However, real non-residential fixed investments picked up, rising 9.9 percent in the second quarter after climbing 2.1 percent in the first, driven by a reversal in building investment.
Residential fixed investment also reversed declines in the first quarter, rising 3.4 percent.
Export growth slowed in the second quarter, rising 3.1 percent, less than half of the growth seen in the first quarter, though the growth of imports in the second quarter also slowed, rising just 1.9 percent.
Federal spending in the second quarter ticked up 2 percent after falling sharply in the first quarter, with both defense and non-defense spending increasing.
Meanwhile, state and local government spending dropped 2.8 percent, a slower rate of decline than in the first quarter.
The price index for gross domestic purchases increased by 3.3 percent in the second quarter, 0.1 percent higher than initially reported.
However the "core" price index, which excludes the volatile food and energy sectors, increased less swiftly, rising 2.6 percent. The increase was, however, higher than the 2.4 percent increase seen in the first quarter.
The GDP implicit price deflator was revised to 2.5 percent from the previously reported 2.3 percent. Most economists had not expected a revision to the figure.
Corporate profits increased by $57.3 billion in the second quarter, notably stronger than the $19 billion increase in the first quarter.
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