U.S. economic output increased a little more than initially thought in the second quarter, though the overall pace suggests growth will remain sluggish ahead of November's presidential election.
The nation's gross domestic product -- the broadest measure of goods and services produced in the U.S. -- grew at an annual rate of 1.7% between April and June, the Commerce Department said Wednesday. The revised figure is up slightly from the previously reported 1.5%, reflecting better trade, consumer spending, and state and local government spending figures.
The revision matched the forecast of economists surveyed by Dow Jones Newswires.
The slow economic expansion came as corporate profits from current production grew. From a year earlier, profits were up 6.1%. The figure measures business income generated from production during the quarter and excludes items, such as capital gains, which revalue existing assets.
By another measure, corporate profits -- after-tax and unadjusted for inventories and capital consumption -- jumped by 13.3% from a year earlier, though they were down 1.4% from the prior quarter. The after-tax numbers more closely reflect what companies would report in quarterly accounting.
The latest estimate of economic growth comes as Republicans gather in Tampa, Fla., formally to nominate Mitt Romney as the party's candidate for president. The GOP blames the slow recovery and attendant high unemployment on President Barack Obama's handling of the economy.
The Obama administration has highlighted continued growth out of the depths of a recession that began under a Republican administration. GDP has expanded for 12 consecutive quarters.
Still, unemployment remains above 8% and the economy has slowed from the first quarter's 2.0% and the fourth quarter's 4.1% annual growth rate, complicating Obama's efforts to win a second term.
While politicians debate appropriate responses to slow growth, officials at the Federal Reserve are weighing another round of stimulus.
In minutes of their latest meeting, released a week ago, officials signaled that they are readying new measures to boost the recovery unless data point to "a substantial and sustainable" pickup in activity.
The Fed's policy makers next meet formally on Sept. 12 and 13. In the meantime, Chairman Ben Bernanke may offer new insight on the central bank's thinking when he speaks Friday at its Jackson Hole, Wyo., conference.
Wednesday's report offered some latitude for the Fed to act. The price index for personal consumer expenditures -- the Fed's preferred gauge for inflation -- rose a modest 0.7% from the previous quarter. Year-over-year inflation is up 1.7%, below the Fed's 2% target.
Stripping out volatile food and energy, the price index for personal consumer expenditures rose 1.8% from the prior quarter.
The revision to second-quarter GDP figures follows better-than-expected exports, fewer imports and stronger personal consumption. The improved consumer spending, though, partly reflected heavier outlays for services like electricity and natural gas rather than goods.
Government spending has been a drag on the economy -- though not as much as initially thought.
Other areas were weaker. Business spending was revised lower on smaller inventories.
Real final sales -- GDP less changes in private inventories -- increased 2.0% in the second quarter, down from a 2.4% gain in the prior period.
The latest quarter's small overall gain is consistent with the recovery as a whole, which is the second-weakest rebound of the post-World War II era.
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