World

U.S. Economy Shrank 1% In Q2

by candice.tsuei | July 31, 2009 at 03:59 pm

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The U.S. economy shrank at a 1% in the second quarter of 2009, much lower than the 1.5% economists had been projecting.

The Department of Commerce said that the "much smaller decrease in real GDP in the second quarter" was mainly a result of smaller decreases in non-residential fixed investment, personal consumption expenditures (PCE), private inventory investment, and exports.

In interviews, small-business owners across the country say the ground is slowly reforming under their feet, and that business no longer seems to be careening downward.

The annualized rate of 1% is a notable improvement from the 6.4% in the first quarter this year, and the 5.4% from the fourth quarter last year.

"We're seeing signs of stabilisation in a lot of areas of the economy, so the worst is definitely behind us," said Scott Brown, chief economist at Raymond James & Associates.