The U.S. economy contracted at a much smaller rate than in the past six months, the Commerce Department reported Friday. Real gross domestic product fell at a 1.0% annualized rate in the second quarter, compared with an average 5.9% drop over the past two quarters. However, this is the fourth straight quarter with a contraction in GDP. This has never happened before since records began in 1947.
The big story for the second quarter was in the much smaller decrease in business investment, exports and inventories. There was also an upturn in federal and state government spending. The government also released comprehensive benchmark revisions to GDP data, but they did little to change the basic story of the economy.