The U.S. gross domestic product report showed the expected surge in the second quarter to 1.9% real growth, while annual revisions lowered growth in 2004-07 and into the first quarter of 2008, mainly due to less consumption and a steeper drop in residential investment than previously recorded.

Real growth in fourth-quarter 2007 is now down 0.2% and the first quarter is up 0.9% — still not enough slippage to meet the traditional textbook definition of recession that requires back-to-back GDP declines. But certainly these lower growth estimates confirm the difficulties the economy faced at the turn of the year.

The second-quarter growth spurt represents a rebound that reflects more exports, a lesser decline in residential spending, and a 4.0% jump in nondurables probably related to tax rebates being utilized. Most of the dollar gain was in clothing and “other” spending — smaller items that would be most associated with small splurges using the rebates.

— Market News International

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