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US economic contraction unrevised US economic contraction unrevised
(10 minutes later)
The US economy shrank at an annual pace of 1% between April and June, unchanged from an initial estimate released last month, according to the latest data.The US economy shrank at an annual pace of 1% between April and June, unchanged from an initial estimate released last month, according to the latest data.
Analysts had been expecting a downward revision, with some forecasting a contraction of 1.5%.Analysts had been expecting a downward revision, with some forecasting a contraction of 1.5%.
The second quarter figures were a significant improvement on the 6.4% contraction between January and March. The second quarter figures were an improvement on the 6.4% annual rate of contraction between January and March.
US growth figures are revised frequently and the different estimates can vary significantly.US growth figures are revised frequently and the different estimates can vary significantly.
The better-than-expected figure for the second quarter of the year will provide further optimism to investors looking for more signs of recovery in the US economy.
WHAT IS GDP? Gross Domestic Product, referred to simply as GDP, is the most commonly used indicator of national income. In essence, it measures the economic output of an economyThe US uses something called annualised GDP, which reflects the change over a certain period if it were continued at the same pace over a whole year.GDP figures are often revised, but particularly so in the US. For example, figures for US GDP between January and March were first estimated at a 6.1% contraction. This figure was subsequently revised up to a 5.7% contraction, then up to 5.5%, before being revised down to 6.4%.
On Wednesday, figures showed that orders for US durable goods - those that are expected to last more than three years - increased by 4.9% in July, well above analysts' expectations.
At the same time, separate figures showed that the annual rate of sales of new US homes rose 9.6% last month, again higher than expectations.
This was the biggest rise in sales of new houses since September last year.
Data released last week showed a 7.2% rise in existing home sales in July.
All these encouraging figures were released after US central bank chief Ben Bernanke said the US economy was close to recovery.
"The prospects for a return to growth in the near term appear good," he told a conference in Wyoming last week.
Earlier this month, figures showed that the Japanese, German and French economies have emerged from recession.
Japanese gross domestic product (GDP) grew by 0.9% in the second quarter of 2009, while German and French GDP both grew by 0.3%.