WASHINGTON — The annualized rate of expansion for real gross domestic product slowed to a 2.4% pace in the second quarter, the smallest gain in three quarters, the Commerce Department reported Friday.
Greater imports and slower inventory growth contributed to the downshift in economic expansion, outweighing gains in real estate and state and local spending. Consumer spending, which accounts for about 70% of real GDP, rose 1.6% in the second quarter from the first three months of the year. Economists polled by Thomson Reuters expected real GDP to gain 2.5%.
Real GDP in the first quarter was revised upward to 3.7% from the 2.7% growth rate initially reported last month.
Core personal consumption expenditures rose 1.1% in the second quarter, in line with economists’ estimates. Core PCE in the first quarter was revised upward to a 1.2% from the previous 0.7% gain. The second-quarter total PCE edged higher by 0.1%, the smallest gain since the first quarter of 2009.
“The post-recession rebound is history,” Bart van Ark, chief economist at the Conference Board, said Friday. “We don’t foresee a double-dip [recession], but we do expect growth to slow even more markedly, to a 1.6% annualized rate, in the second half of the year.”