Washington (Archyde.com)
The US economy contracted in the second quarter at a slower pace than initially thought, as consumer spending relieved some pressure on growth caused by the slowdown in the pace of the build-up of inventories, which reduced fears of a recession, while a report by the Labor Department showed a decline in initial claims for government unemployment benefits. .
The growth data was contained in a report released by the Commerce Department yesterday, and was in line with recent strong readings for the labor market, retail sales and industrial production.
The government said in its second estimate of gross domestic product that it contracted 0.6 percent on an annual basis in the fourth quarter, compared to an earlier estimate of a contraction of 0.9 percent. The economy shrank 1.6 percent in the first quarter.
Economists polled by Archyde.com had expected gross domestic product to be revised slightly higher, declining 0.8 percent.
While GDP contraction for two consecutive quarters meets the standard definition of a recession, the broader criteria for economic activity indicate slow growth rather than contraction.
Unemployment rate down
A separate Labor Department report yesterday showed that initial claims for state unemployment benefits fell by 2,000 to a seasonally adjusted 243,000 for the week ending August 20. Claims have remained close to the 250,000 level since hitting an eight-month high of 261,000 in mid-July.
The number of people receiving benefits following the first week fell 19,000 to 1.415 million during the week ending August 13.
The unemployment rate fell to its lowest level before the pandemic, at 3.5 percent in July, from 3.6 percent in June. There were 10.7 million jobs at the end of June, with 1.8 jobs available for every unemployed person.
Federal Reserve Symposium
25 On the other hand, the major indices on Wall Street rose yesterday, supported by technology and growth stocks, while the focus shifted to the annual Jackson Hole symposium of the Federal Reserve in search of indications regarding the monetary policy expectations of the US Central Bank.
The Dow Jones Industrial Average rose 60.04 points, or 0.18 percent, to 33,029.27 points.
The Standard & Poor’s 500 index opened up 12.49 points, or 0.30 percent, to 4,153.26 points, while the Nasdaq Composite Index rose 74.84 points, or 0.60 percent, to 12,506.37 points.