The American economy shrank at an annualized rate of 1 percent in the second quarter of 2009, the Bureau of Economic Analysis reports today. Put another way, the growth rate of -1 percent in gross domestic product means the situation is still getting worse, but the plunge is not nearly so steep as it had been.
The economy had been going through an annualized contraction of 6.4 percent in the first quarter of 2009. That contraction of 6.4 percent is the final number for the quarter, released today as a revision upward to a revision downward. Before today's final accounting, the BEA pinned the first quarter number as a contraction of 5.5; shrinking at 6.4 is a fair bit worse.
Today's -1 percent rate is also subject to being revised up or down.
The BEA cites a 5.6 percent rate of increase in federal, state and local spending (stimulus, anyone?) and much smaller decreases in private investment. Consumer spending, which amounts to two-thirds of the economy, fell at rate of 1.2 percent.
Economists in a Bloomberg survey predict the economy will grow by 1.5 percent from July to December.
Bonus: Recession worse than estimated.
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