U.S. Second-Quarter GDP Revised Lower

Even as economists were scrambling to calculate the hit Hurricane Katrina is having on third-quarter 2005 GDP growth, the U.S. Commerce Department was releasing its second estimate of second-quarter GDP. And it was a surprise. Adjusted for inflation, the U.S. economy grew at a seasonally adjusted annual rate of 3.3% from April through June, a tenth of a percentage point lower than the 3.4% rate originally estimated. Economists generally expected GDP to hold at a 3.4% on second look.

Imports were higher than initially calculated. Consumer spending was less -- and not completely offset by higher business investment.

In the first quarter of this year, GDP increased at a 3.8% annual rate.

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