The U.S. economy grew more sluggish than initially estimated in the second quarter, and corporate profits nearly dried up, further evidence that the recovery is losing steam.
Gross domestic product, the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 1.6% from April to June, the Commerce Department said Friday.
In the government's first report of the economy's benchmark indicator a month ago, the growth rate was estimated to have slowed to 2.4% after a 3.7% expansion in the first quarter.
Still, the revised estimate for the second quarter was above expectations for a 1.3% gain among economists polled by Dow Jones Newswires.
Friday's report also showed that companies barely managed to post profit gains, following several very profitable quarters. After-tax earnings edged up 0.1%, well off the previous quarter's gain of 11.4%. First-quarter profits were revised down from the initial estimate of a 12.1% increase.
Year over year, profits remained 37.7% higher, with companies cutting costs by trimming payrolls.
So, it is now clear that GDP is in a downward trend after a brief sugar high in the 4th quarter of 2009 from the so-called stimulus package. Here are the GDP numbers:
1st quarter of 2009: -4.90%
2nd quarter of 2009: -.70%
3rd quarter of 2009: 1.6%
4th quarter of 2009: 5%
1st quarter of 2010: 3.7%
2nd quarter of 2010: 1.6% (revised downward from 2.4%)
Bad economic policy ideas continue to abound: The very same people that trumpeted from the highest tree tops that the stimulus was and has worked are now running around telling us that it simply wasn't big enough. Now we have liberals in Congress making noise about a second package. The first one didn't work so they want to try it again! We even see liberal economist Paul Krugman calling to use Fannie and Freddie, agencies that are in conservatorship and that currently carry $5.5 trillion in public liabilities, in more useless transfer schemes. My lord, when will the madness end?