WASHINGTON (

TheStreet

) -- Revising economic data is business as usual in the world of government statistics, but the Commerce Department's most recent swipe at quarterly gross domestic product figures offered a more optimistic picture of the economy than predicted.

The Bureau of Economic Analysis said that the economy shrank by a much more svelte 0.7% annual rate during the second quarter, or over the period between April and June.

Several analysts' forecasts held that this newest revision

would produce a 1.2% contraction.

The slowing contraction pace also marked an improvement compared to the government's own previous estimate released last month, which showed GDP shrinking by 1% during the quarter.

During the first quarter, GDP decreased by 6.4%.

Consumer spending dropped by 0.9%, slightly better than the previous estimate. But business inventories also tumbled by $160.2 billion during the quarter, more than the previous $159.2 billion estimate and compared to a first quarter decrease of $113.9 billion.

After excluding the change in inventories, the Commerce Department said GDP grew by 0.7% in the quarter, which compares to a 4.1% decrease in the first quarter.

While the sum total of goods and services produced in the U.S. may be looking brighter, boding well for next quarter's GDP showing, job metrics presented a more dour picture this morning. Earlier, a report showed employers slashed private sector payrolls to the tune of

254,000 jobs in September, which was more than economists expected, though still less than last month's cuts.

-- Written by Sung Moss in New York

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