GDP Revised Down, Expands 1.1% in Second Quarter of 2016

Previous estimate put Q2 growth at 1.2 percent

hand holding money
AP

The U.S. economy expanded in the second quarter of 2016 with real GDP growing 1.1 percent, a lower rate than previously estimated, according to the second estimate released by the Bureau of Economic Analysis.

"The downward revision to the percent change in real GDP primarily reflected downward revisions to state and local government spending and to private inventory investment and an upward revision to imports," the bureau said.

Real GDP represents the inflation-adjusted value of goods and services produced in the economy. The second quarter growth of 1.1 percent, which includes performance from April, May, and June, was an increase from the 0.8 percent growth recorded in the first quarter of 2016.

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Second quarter growth this year was lower than second quarter growth in 2015, when GDP expanded at 3.7 percent, according to the Bureau of Economic Analysis.

"Today’s disappointing news that the economy expanded even slower than reported is another reminder that we cannot continue President Obama and Hillary Clinton’s failed economic policies for another four years," said Reince Priebus, chairman of the Republican National Committee. "Economists say Hillary Clinton’s tax plan alone will slow economic growth, reduce wages, and kill jobs."

"Donald Trump is a proven job creator who has spent his entire career building a successful business and will devote his full energy to restoring our economy," Priebus said. "Hillary Clinton, on the other hand, is promising more of the same failed status quo and has spent her career profiting off of public office. The choice for economic growth in this election could not be clearer."

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

The bureau will release its third and final estimate for the second quarter of 2016 on Sept. 29.