|
GDP posts soft 2Q gain
|
 |
September 24, 1998: 9:20 a.m. ET
Output rose 1.8%, slowest growth rate in three years but ahead of forecasts
|
NEW YORK (CNNfn) - U.S. output posted its weakest growth in three years in the second quarter, although the slowdown was not as large as expected, the Commerce Department reported Thursday.
Final second-quarter real gross domestic product results showed U.S. output expanded at a 1.8-percent annual rate from April through June, the slowest rate of growth since 1995's second-quarter gain of 0.4 percent.
Nonetheless, the 1.8-percent gain was higher than the department's preliminary estimate of a 1.6-percent gain and economists' forecast of a 1.7-percent rise.
The Commerce Department revised its second-quarter estimates because consumer spending was stronger than anticipated.
The bond market reacted coolly to the news. The benchmark 30-year Treasury bond fell 14/32 in price for a yield of 5.18 percent.
The implicit price deflator, a key gauge of inflation, remained soft with a 0.9-percent rise, compared with a 0.8-percent gain estimated in July.
Much of the second-quarter weakness came from the effects of the nearly eight-week strikes at General Motors Corp. (GM). One economist said the economy should begin showing signs of normalcy by the end of the year.
"We'll see a strong economy in the fourth quarter from a post-GM strike rebound," said Jim Barkocy, domestic economist at Brown Brothers Harriman. "There's enough underlying strength in the U.S. economy to postpone a downturn."
Business inventories jumped to a $38.2 billion annual rate. Non-farm inventories rose to $29.9 billion.
Exports fell at an annual rate of $245.2 billion, compared with an estimated $246.3 billion. 
-- from staff and wire reports
|
|
|
|
|
|
Commerce Department
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
