U.S. economy grew 3.4 percent in second quarter

Real gross domestic product (GDP)—the output of goods and services produced by labor and property located in the U.S.— increased at an annual rate of 3.4 percent in the second quarter of 2005, according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.8 percent. The second-quarter increase marks the ninth straight quarter in which the GDP grew at a rate exceeding three percent.

The major contributors to the increase in real GDP in the second quarter were personal consumption expenditures, exports, equipment and software, residential fixed investment, and government spending. The contribution of these components partly was offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Final sales of computers contributed 0.43 percentage point to the second-quarter change in real GDP after contributing 0.37 percentage point to the first-quarter change. Motor vehicle output subtracted 0.08 percentage point from the second-quarter change in real GDP after contributing 0.15 percentage point to the first-quarter change.