US GDP (gross  domestic product) fell at a 1% annual rate in the second quarter, the Bureau of Economic Analysis of the Commerce Department said Friday, in the first estimate for the period. First-quarter GDP was revised to a 6.4% drop from an earlier reading of a 5.5% decline. Wall Street expected a bigger decline in second-quarter GDP. Economists surveyed by Dow Jones Newswires projected a 1.5% decrease. But the slump was still smaller than the contraction over the previous nine months, in a powerful signal that the recession has eased. GDP has now fallen four-consecutive quarters, the first time that has happened since quarterly records began being kept in 1947.

Real gross domestic product measures the output of goods and services produced by labour and property located in the United States.

Gross domestic product

The smaller decrease in real GDP reflected:

• Much smaller decreases in business investment, including inventory investment, and in exports
• An upturn in government spending
• A smaller decline in housing

Offsetting these movements:

• A downturn in consumer spending
• A smaller decline in imports

Prices

Prices of goods and services purchased by US residents rose 0.7% after falling 1.4%. Energy prices decreased much less than in the first quarter; food prices declined more. Prices less food and energy rose 1.1%, after rising 0.2%.

Disposable income

Real disposable personal income - - income adjusted for inflation and taxes - - rose 3.2% in the second quarter, after rising 1.1% in the first quarter.

Current-dollar disposable income turned up, rising 4.6% after falling 0.4%. The upturn reflected in part the one-time $250 benefit payments and lower taxes from the American Recovery and Reinvestment Act  - - the Obama stimulus program.

Personal saving as a percent of disposable personal income rose to 5.2 % from 4.0%.

Comprehensive revision BEA also released its 2009 comprehensive revision of the GDP accounts. For the past several years, revisions were generally small. However, for 2008, growth was revised to 0.4% from 1.1%.