Second quarter growth exceeds expectations

July 27, 2012 at 11:25 AM

WASHINGTON, July 27 (UPI) -- The U.S. economy grew more than expected in the second quarter, the Commerce Department said Friday.

The gross domestic product -- the total output of the U.S. economy -- rose 1.5 percent from the first quarter, markedly higher than the consensus forecast of 1.3 percent predicted by economists.

The government also revised its first quarter estimate higher, from 1.9 percent to 2 percent.

The department's Bureau of Economic Analysis said gains were made in consumer spending, exports and fixed investment among businesses.

On the negative side, imports, which subtracts from the GDP, rose in the second quarter. There was also less government spending on the state and local level.

The automobile industry contributed 0.13 percent to the economy's growth. Computer sales floundered, taking away 0.07 percent from the GDP's second quarter growth.

Consumer spending that makes up about 70 percent of the GDP rose 1.5 percent in the quarter after rising 2.4 percent in the first quarter over the fourth quarter of 2011.

Spending on big ticket items, called durable goods, dropped 1 percent, while spending on non-durable goods rose 1.5 percent.

Spending on services rose 1.9 percent after rising 1.3 percent in the previous quarter.

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