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FRIDAY, September 26, 2008 GDP GROWS 2.8 PERCENT IN SECOND QUARTER “Final” Estimate of GDP The economy grew at an annual rate of 2.8 percent in the second quarter, compared with 0.9 percent in the first quarter, according to the “final” estimate released by the Bureau of Economic Analysis. The second-quarter estimate was revised down from a “preliminary” estimate of 3.3 percent. Gross Domestic Product GDP growth in the second quarter reflected a surge in exports. Consumer spending remained weak. In addition, housing continued to act as a drag on GDP growth. The downward revision to second-quarter growth stemmed from updated information on consumer spending for services, net exports, and investment in equipment and software. Quarter-to-Quarter Growth in Real GDP 6 Percent 4 2 0 -2 III IV 2004 I II III 2005 IV I II III 2006 IV I II III 2007 IV I II 2008 Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits Second-quarter corporate profits fell 3.8 percent at a quarterly rate, after falling 1.1 percent in first quarter. Profits of domestic financial companies and net profits of U.S. companies earned abroad accounted for nearly all of the decline. Quarter-to-Quarter Growth in Corporate Profits 30 25 20 Percent 15 10 5 0 -5 -10 III IV 2004 I II 2005 III IV I II 2006 III IV I II III 2007 IV I II 2008 Corporate profits growth is measured as the percent change from the previous quarter. 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: The “advance” estimate of GDP for the third quarter of 2008 will be released on October 30, 2008. Contact: Ralph Stewart or Thomas Dail (202) 606-2649 Bureau of Economic Analysis, U.S. Department of Commerce