U.S. business investment reportedly contracted more sharply that previously estimated in the second quarter and corporate profit growth was tepid, casting a shadow on the economy, stoking fears of a recession.
Washington said business investment declined at a 1.0% annualized rate last quarter. That was the steepest decline since the fourth quarter of 2015. Business investment was previously estimated to have declined at a 0.6% pace.
The rate was pulled down by an 11.1% decline in spending on structures, which showed drops in the categories of commercial and health-care, and mining exploration.
But the report also maintained that gross domestic product increased at an unrevised 2.0% rate in the first quarter as the strongest consumer spending in four and a half years offset weak exports and a slower pace of inventory investment. The economy grew at a 3.1% rate in the January-March quarter. It expanded 2.6% in the first half of the year.
When measured from the income side, the U.S. economy grew at a 1.8% rate in the second quarter.
