Economic Growth Cools a Bit

GDP grew by a revised 2.8% in the second quarter, less than the government previously estimated.
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The pace of economic growth was revised downward in the second quarter.

The government said gross domestic product was 2.8%, less than the first estimate of 3%. Analysts were forecasting that the economy grew at an annualized rate of 2.7% during the quarter.

In terms of inflation, the chain deflator gauge came in at 3.2%, meeting forecasts. The gross domestic purchases price index was unchanged at 3.5%. The core personal consumption expenditure price index rose 1.7%.

The downward revision in the pace of growth reflected the impact of higher imports. Real imports of goods and services increased 14.1%, instead of the original 10.6% reading.

The second-quarter growth rate is a significant slowdown from the first quarter, when the economy expanded by 4.5%.

Gross domestic product grew at a 4.1% annualized rate in the final three quarters of 2004 and a red-hot 8.2% in the third quarter of last year.