U.S. GDP falls short of expectations

July 31, 2008 at 1:05 PM

WASHINGTON, July 31 (UPI) -- Initial gross domestic product figures indicate the U.S. economy grew at a 1.9 percent annual rate in the second quarter of 2008, the government said Thursday.

The GDP advanced faster than the 0.9 percent annual rate in the first quarter but the second-quarter figure was below economists' expectations. The consensus forecast was 2.4 percent.

The Bureau of Economic Analysis said the GDP received positive contributions from exports, consumer spending, non-residential structures and a decline in imports. Government spending also increased, helping to offset declines in private inventory investment, residential fixed investment, and equipment and software.

Growth in computer sales gained 0.05 percent in the first quarter to 0.12 percent but the decline in motor vehicle sales accelerated from 0.41 percent to 1.07 percent in the second quarter, the report said.

Personal consumption, which fuels two-thirds of the economy, grew by 1.5 percent following a 0.9 percent growth rate in the first quarter, the report said.

The prices index for domestic purchases rose sharply, up 4.2 percent, while core inflation, excluding food and energy prices, rose 2.2 percent, unchanged from the first quarter, the report said.

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