Real gross domestic product increased at a much slower 1.3% rate in the second quarter as a drought slowed the nation's farm activity, according to the third GDP estimate from the Commerce Department.
That is a relatively steep drop from the first-quarter when GDP grew at 2% and a decline from the first 2Q estimate of GDP growth in the 1.7% range.
"Pulling down on the second revisions were lower estimates for growth in equipment and software, residential investment, and inventories," analysts with Econoday said. "The downward revision to inventory growth was notable in that businesses are keeping stocks under control. Economy-wide inflation according to the GDP price index was unrevised at 1.6% annualized. The median market forecast was for 1.6%."
The negative GDP report is a contrast to the most recent Labor Department report, which shows claims for unemployment benefits falling by 26,000 filings last week.