GDP report: Economic growth slightly faster

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- The economy grew at a slightly faster pace in the second quarter than previously thought, but the pace of growth is still painfully slow.

The nation's gross domestic product, the broadest measure of economic activity, was upwardly revised to an annual growth rate of 1.7% in the three months ending in June, the Commerce Department said Thursday.

While a slight uptick came as good news, the minor revision wasn't a major shocker either. Economists surveyed by Briefing.com had forecast the number to stay unchanged at 1.6%.

Less than 2% GDP growth is considered too sluggish to prompt businesses to start hiring again

"A little bit of good news is better than a little bit of bad news, but it's still just little," said Robert Brusca, chief economist, Fact and Opinion Economics.

Thursday's number is the government's third estimate for second-quarter GDP, after it sharply dropped its forecast in August from an initial 2.4% growth rate.

That revision was so dramatic, it shocked Wall Street and soon after, two thirds of economists surveyed by CNNMoney.com increased their forecasts for a double-dip recession.

But while the odds of the nation slipping back into recession are higher, they are still relatively unlikely at about one-in-four, the survey showed. But most economists are still predicting a weak economy going forward.

Overall, GDP continues to be dragged down by a widening trade deficit between the United States and foreign exporters, said Mark Vitner, senior economist with Wells Fargo.

But the report did contain a small sign of hope for the recovery, he said: spending by both consumers and businesses was up significantly from the prior quarter, and investments in new equipment and software alone were up nearly 25%.

"When you look into the details of the report, consumer spending and business investment actually ticked up," Vitner said. "They're not off the charts, but they are posting very solid gains. So in some ways the economy looks a bit firmer."

The Commerce Department calculates GDP as a measure of goods and services produced by labor and property in the United States. The government often revises the number multiple times. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,979.13 59.54 0.35%
Nasdaq 4,526.48 -1.03 -0.02%
S&P 500 1,986.51 4.91 0.25%
Treasuries 2.43 0.02 0.87%
Data as of 4:54pm ET
Company Price Change % Change
Bank of America Corp... 15.52 0.07 0.45%
Apple Inc 100.57 0.04 0.04%
General Electric Co 26.36 0.31 1.19%
Intel Corp 34.50 0.16 0.47%
Staples Inc 11.32 -0.30 -2.58%
Data as of 4:03pm ET

Sections

Warren Buffett's investment firm will pay nearly $900,000 to settle allegations it did not tell federal regulators before taking a major ownership stake in a company, the government said. More

Median income is up 3.8% since 2011, though it's still down since the economic recovery began in 2009. More

Small business owners say the economy is still their biggest challenge, which keeps them from expanding and hiring, according to a CNNMoney-Manta survey. More

When hairdresser Mark Bustos isn't cutting the hair of fashion designers and real estate moguls, he's traveling around the world giving free haircuts to the homeless. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.