Gross Domestic Product Revised Slightly Upward

The U.S. gross domestic product shrunk at an annual rate of 0.7 percent in the second quarter of the year, far slower than in the preceding quarter and less than previous estimates had predicted.

The revised figures, released today by the Commerce Department, showed a slower decline than the 1.0 percent decrease estimated last month. It was still the fourth straight quarterly decline, though, the longest series of declines in more than 60 years of recordkeeping.

"Today's revision of real GDP in the 2nd quarter indicates that the economy has begun to stabilize," said Mark Doms, chief economist for the Department of Commerce. "The economy is moving in the right direction, and further stimulus spending should support this momentum in the coming months."

The second quarter figures are a marked improvement from the first quarter of the year, when the economy shrank at a 6.4 percent annual rate, following a 5.4 percent decline in the fourth quarter of 2008. The revised figures are also better than economists had expected, with several surveys predicting a slight worsening of the second quarter rate.

Expenditures down, profits up

Personal expenditures were down 0.9 percent in the second quarter, following an increase of 0.6 percent in the first. Exports of goods and services were down 4.1 percent, following a 29.9 percent decrease in the first quarter of the year, while imports were down 14.7 percent, compared to a 36.4 percent drop in the first quarter.

Domestic profits of financial corporations were up by $28.5 billion, compared to a $115.9 percent increase in the first quarter; nonfinancial corporations posted a gain of $29.8 billion in the second quarter, compared to a decline of $40.2 billion in the first.

The first estimate on the third quarter is due out at the end of October and is predicted to show a 3-4 percent annual rate of increase, the Wall Street Journal reports.

Unemployment rate slows

In other economic news, private sector unemployment increased by 254,000 in September, slightly less than the revised August rate of 277,000, according to a report issued Wednesday by the payroll company Automatic Date Processing, Inc. The survey covers private-sector workers only; a more comprehensive report is due out Friday from the Labor Department.

The September figures were slightly higher than those predicted in a Dow Jones survey of economists, which had predicted an increase of 240,000.