THE RECOVERY SPUTTERS:
Second Quarter GDP Contracts by 2.9% Annual Rate
SEPTEMBER 25, 1996
The economic growth rate for the first six months of 1996 was still a buoyant 6.4% annual rate. With capital investment beginning to firm up, moreover, the EPA reported that the moderate recovery trend was still continuing.
The decline in quarterly GDP figures was the first since the last three months of 1994. Domestic demand accounted for 0.5 points of the 0.7% second-quarter GDP dip, while external demand (exports minus imports) contributed the remaining 0.2 points.
The biggest element in the slowdown was lackluster personal consumption, which declined by 1.3% from the previous quarter; first-quarter spending was up 2.4% from the previous three months thanks partly to the extra spending day in February. Spending was particularly slugging on meats, automobiles, and clothing. Personal consumption dragged GDP down by an equivalent of 0.8 points.
|Private housing investment||-6.7||-5.7||7.2||8.4||3.7|
|Private plant and
|Increase in private inventories||--||75.0||40.9||6.2||-40.4|
|Increase in public inventories||-47.7||-37.3||-48.8||1235.6||-66.5|
|Net exports of goods and services||-52.0||-32.1||-50.7||-59.7||-85.4|
|Exports of goods and services||4.2||-1.6||-1.3||-1.8||1.0|
|Imports of goods and services||14.5||3.0||6.4||0.9||2.6|