Real GDP advanced at an annual rate of 2.3% in second quarter 1999.

Purchasing, September, 1999

Real GDP advanced at an annual rate of 2.3% in second quarter 1999, according to first estimates from Commerce. Advance poll of economists by Market News Service had put the second quarter growth rate at a much higher 3.4%. In view of Fed interest rate rhetoric, the second-quarter figure represents a welcome decline from the first-quarter growth rate of 4.3%.

Major contributors to the second-quarter gain are consumer spending ( 4% annual rate), business investment ( 10.8%), and exports ( 4.5%). Offsetting these gains were negative effects of rising imports and a decline in inventory accumulation. Government spending also declined by a rate of 1.2% compared to a 4.2% growth rate in first quarter.