By CountingPips.com
The U.S. economy expanded in the second quarter of 2010 for a fourth straight quarter as business investment rose by the most since 2006, according to a release by the U.S. Commerce Department. The first “advance” government estimate showed that the U.S. Gross Domestic Product grew on an annualized basis by 2.4 percent in the April to June quarter following a revised real 3.7 percent growth rate in the first quarter. This marked the fourth straight quarter of
Despite the increase,the GDP data failed to equal market forecasts that were expecting GDP growth to expand by 2.6 percent for the quarter.
Business investment spending was the key driver of growth in the quarter and rose by 17.0 percent following an advance by 7.8 percent in the first quarter. This marked the largest increase in this sector since the first quarter of 2006.
Consumer spending continued to increase and rose by 1.6 percent in the second quarter although at a lower level than the 1.9 percent increase registered in the first quarter. Consumer spending makes up roughly two-thirds of U.S. economic activity and the first quarter increase had marked the largest gain since the first quarter of 2007.
A sharp rise in imports worked to contain the GDP growth for the quarter as imports surged by 28.8 percent in the second quarter following a first quarter rise of 11.2 percent. Exports of goods and services, meanwhile, grew by 10.3 percent in the second quarter following a gain of 11.4 percent in the first quarter.
Also contributing to the economic expansion was an increase in spending by the federal government which rose by 9.2 percent following a 1.8 percent expenditure in the first quarter. Private business inventories also added $75.7 billion in inventories for the second quarter which contributed 1.05 points to the GDP growth.
The second release for the U.S. GDP is scheduled for August 27, 2010 at 8:30 A.M. EDT.