U.S. business investment contracted more sharply than previously estimated in th...
The skyline of lower Manhattan is seen before sunrise in New York City, U.S., July 17, 2019. REUTERS/Brendan McDermidWASHINGTON - U.S. business investment contracted more sharply than previously estimated in the second quarter and corporate profit growth was tepid, casting a shadow on the economy, which is being stalked by financial market fears of a recession.
After-tax profits without inventory valuation and capital consumption adjustment, which correspond to S&P 500 profits, increased at a downwardly revised 3.3% rate. Profits were previously reported to have advanced at a 4.8% rate in the second quarter. When measured from the income side, the U.S. economy grew at a 1.8% rate in the second quarter. Gross domestic income was previously reported to have increased at a 2.1% pace in the April-June quarter. It rose at 3.2% rate in the first quarter.
Federal Reserve Chair Jerome Powell said last week policymakers “expect the economy to continue to expand at a moderate rate,” but reiterated that “weakness in global growth and trade policy uncertainty have weighed on the economy and pose ongoing risks.” Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, surged at a 4.6% rate in the second quarter, a pace last seen in late 2017. The last time consumer spending grew faster was in the fourth quarter of 2014, when it advanced 4.9%.
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