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GDP growth slowed in second quarter

Real gross domestic product—the output of goods and services produced by labor and property located in the U.S.—increased at an annual rate of 2.9 percent in the second quarter of 2006, according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 5.6 percent.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, nonresidential structures, exports, and state and local government spending that were partly offset by negative contributions from residential fixed investment and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the second quarter primarily reflected a deceleration in PCE for durable goods, downturns in equipment and software and in federal government spending, decelerations in exports and in PCE for nondurable goods, and a larger decrease in residential fixed investment that were partly offset by a deceleration in imports, an acceleration in PCE for services, and an upturn in private inventory investment.

The full release from the U.S. Department of Commerce's Bureau of Economic Affairs can be found here.