July 30, 2010; Gross Domestic Product Down, Business Spending Up But Consumer Spending Down.The Commerce Department today released the estimated Gross Domestic Product (GDP) for the second quarter (from April through June), which showed growth at a 2.4% pace. This is down from the revised 3.7% growth for the first quarter. Since it is estimated that a 3% growth rate is necessary just to create enough jobs to keep pace with the population increase, most economists think it is unlikely that we will see the unemployment rate fall for some time.
However, there was some good news in the Commerce Department report today: Business spending on equipment and software increased at a blistering 21.9% pace in the second quarter; Spending on commercial projects, such as office buildings and plants, increased 5.2%; And home builders increased spending by 27.9% for the second quarter.
On the less positive side, consumer spending rose only 1.6% for the second quarter, down from the 1.9% increase in the first quarter. And, consumer saving increased to 6.2% of disposable income in the second quarter.
|
|