WASHINGTON – The U.S. economy shrank less than analysts had expected from April through June, adding to hopes that the worst recession since the Great Depression is at or near an end, Bloomberg News reported.
The world’s largest economy contracted at a 0.7 percent annual rate in the second quarter, its best performance in more than a year, according to a revised final estimate released Wednesday by the U.S. Commerce Department.
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Economists had expected GDP to contract at a 1.2 percent annual rate, according to the median forecast in a Bloomberg survey of 78 economists.
The Commerce Department originally said the U.S. gross domestic product, the sum of all goods and services produced, fell at a 1 percent annual rate in the second quarter.
By contrast, in the prior quarter, from January through March, the American economy shrank at a 6.4 percent annual rate.
Analysts gave much of the credit for the better-than-expected economic performance to government stimulus programs such as Cash for Clunkers and the first-time homebuyer credit.
“It’s a much better picture than a few months ago,” Lindsey Piegza, an economist at FTN Financial in New York, told Bloomberg before the report’s release. “Inventories and government programs will drive growth in the second half. We’re expecting a mild recovery as the job market is still very weak.”
The second-quarter GDP decline was the fourth in a row, marking the longest string of quarterly contractions since records began in 1947. The U.S. economy was 3.8 percent smaller at the end of the second quarter than a year earlier.
