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FRIDAY, July 31, 2009 ECONOMY DECLINES IN THE SECOND QUARTER “Advance” Estimate of GDP ug Real gross domestic product (GDP) declined 1.0 percent in the second quarter of 2009 after declining 6.4 percent in the first quarter, according to estimates released today by the Bureau of Economic Analysis. Quarter-to-Quarter Growth in Real GDP 6 4 Percent 2 0 -2 -4 -6 -8 III IV 2005 I II III 2006 IV I II III 2007 IV I II III 2008 IV I II 2009 Real GDP growth is measured at seasonally adjusted annual rates. Gross domestic product The smaller decrease in real GDP reflected: • • • Much smaller decreases in business investment, including inventory investment, and in exports An upturn in government spending A smaller decline in housing Offsetting these movements: • • A downturn in consumer spending A smaller decline in imports Prices Prices of goods and services purchased by U.S. residents rose 0.7 percent, after falling 1.4 percent. Energy prices decreased much less than in the first quarter; food prices declined more. Prices less food and energy rose 1.1 percent, after rising 0.2 percent. Disposable income Real disposable personal income—income adjusted for inflation and taxes—rose 3.2 percent in the second quarter, after rising 1.1 percent in the first quarter. Current-dollar disposable income turned up, rising 4.6 percent after falling 0.4 percent. The upturn reflected in part the one-time $250 benefit payments and lower taxes from the American Recovery and Reinvestment Act. Personal saving as a percent of disposable personal income rose to 5.2 percent from 4.0 percent. Comprehensive revision BEA also released its 2009 comprehensive revision of the GDP accounts. For the past several years, revisions were generally small. However, for 2008, growth was revised to 0.4 percent from 1.1 percent. 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 “second” estimates of GDP and corporate profits for the second quarter of 2009 will be released on August 27, 2009. Contact: Ralph Stewart or Thomas Dail (202) 606-2649 Bureau of Economic Analysis, U.S. Department of Commerce