Second Quarter Stronger Than Previously Reported

ByJohn S. McClenahen U.S. real gross domestic product -- the output of goods and services produced in the nation adjusted for inflation -- actually grew at an annual rate of 3.3% from April through June of this year, nearly a full percentage point higher than the 2.4% first reported and fractionally higher than the revised 3.1% reported last month, the U.S. Commerce Department said on Sept. 26. The department's final figure for GDP was above the consensus expectation of 3.1% but within the 3.0% to 3.3% range that economists were forecasting. GDP grew at an annual rate of just 1.4% during the first quarter of this year. The faster pace of GDP growth primarily reflected higher consumer spending, more federal defense spending and an upturn in nonresidential fixed investment that were partly offset by a rise in imports. Current-dollar GDP -- the market value of U.S. output of goods and services -- was $10.8 trillion in the second quarter. The Commerce Department's data contain a significant negative number, however. After-tax corporate profits fell 5% during the second quarter of this year, in contrast to a 3.8% gain during the first three months of 2003.