Merrill Lynch Expects Flat GDP Revision

ByJohn S. McClenahen Apparently the U.S. economy came very close to contracting in this year's second quarter. When the U.S. Commerce Dept.'s Bureau of Economic Analysis (BEA) revises economic data for the April-June quarter, the result will be no growth in GDP, says Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. BEA previously reported 0.7% GDP growth in the second quarter. The revision will be a result of more-than-expected inventory liquidation and weaker construction, says Cohen. Last Friday's U.S. trade data, which showed the deficit with the rest of the world widening to $29.4 billion in June, was in line with economists' expectations and will not have an effect on second quarter GDP revision, Cohen adds.