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THURSDAY August 30, 2007 GDP ACCELERATES IN THE SECOND QUARTER Corporate Profits Increase The economy grew at an annual rate of 4.0 percent in the second quarter, compared with 0.6 percent in the first quarter, according to the “preliminary” estimates released by the Bureau of Economic Analysis. The secondquarter growth rate was revised up from the “advance” estimate of 3.4 percent. Gross Domestic Product (GDP) The acceleration in GDP growth reflected upturns in net exports, Federal government spending, and inventory investment, an acceleration in business investment, and a smaller decrease in residential home investment. In contrast, consumer spending decelerated sharply. The upward revision to GDP growth resulted mainly from the inclusion of newly available source data that showed greater increases in business investment and net exports. Quarter-to-Quarter Growth in Real GDP 8 Percent 6 4 2 0 III IV 2003 I II III IV 2004 I II III IV 2005 I II III IV 2006 I II 2007 Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits Second-quarter corporate profits increased 4.5 percent from the same quarter a year ago. Net corporate profits earned abroad increased 21.1 percent. Year-over-Year Growth in Corporate Profits 30 25 Percent 20 15 10 5 0 III 2003 IV I II III 2004 IV I II III 2005 IV I II III 2006 IV I II 2007 Corporate profits growth is measured as the percent change from the same quarter one year ago. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: Additional information that becomes available in the coming weeks will be incorporated in a “final” estimate of second-quarter GDP on September 27, 2007. A revised estimate of corporate profits will also be released. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce