WASHINGTON — The economy grew at a 1.6 percent annual rate in the second quarter, less than previously calculated, as companies reined in inventories and the trade deficit widened.
The revised increase in gross domestic product was bigger than the median forecast of economists surveyed by Bloomberg News and compares with a 2.4 percent estimate issued last month, figures from the Commerce Department showed Friday in Washington. Corporate profits grew last quarter at the slowest rate in a year and employee wages in the prior three months were revised lower.
Slowdowns in housing, business investment and consumer spending are prompting economists to cut second-half growth forecasts.
"The economy has slowed a bit and will probably continue to slow through the second half," said John Silvia, chief economist at Wells Fargo Securities in Charlotte, N.C. "We're skating on thin ice, and we don't have a lot of margin for error."
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Economists projected a 1.4 percent rate of growth in the second quarter, according to the median estimate in the Bloomberg survey in which estimates ranged from 0.5 percent to 2.2 percent. The economy grew at a 3.7 percent pace in the first quarter. Friday's GDP estimate is the second for the quarter, with the final figures set for release on Sept. 30.
Friday's report showed consumer spending, which accounts for about 70 percent of the economy, rose at a 2 percent annual rate in the second quarter compared with a previously reported 1.6 percent pace. The revision reflected revised electricity and natural gas usage data, the Commerce Department said.
Purchases increased at a 1.9 percent rate from January through March.
A lack of job growth, declines in household wealth following slumps in stocks and housing, and the drive to reduce debt and boost savings are reasons consumer spending may struggle to strengthen.
Wages and salaries increased by a revised $6.5 billion in the first three months of 2010 from the fourth quarter, compared with $18.8 billion initially reported. The figures incorporate new, more comprehensive data from the Labor Department and show why consumer spending will be hard-pressed to accelerate in coming months.
Mark Zandi, chief economist at Moody's Analytics, this week said the likelihood of the economy slipping back into a recession is now 33 percent, up from a 20 percent chance 12 weeks ago. New York University economist and forecaster Nouriel Roubini, who predicted the financial crisis, said the odds of a return to recession at 40 percent.
The economy is a top issue for voters in the November congressional elections and polls show the public is increasingly skeptical of President Obama's performance. Public approval for the president's handling of the economy was at 41 percent in an Aug. 11-16 Associated Press-GfK survey, an all-time low and down from 50 percent last July.
The trade gap in the second quarter widened to $445 billion, compared with an initial estimate of $425.9 billion, subtracting 3.37 percentage points from growth, the biggest reduction since record-keeping began in 1947, Friday's report showed. Imports grew at a 32.4 percent pace, the most since 1984.
Slower inventory accumulation contributed 0.63 percentage points to second-quarter growth. The Commerce Department said in its initial report that stockpiles added 1.05 percentage points to growth after adding 2.64 percentage points in the first three months.
Friday's report also showed gross domestic income, or the money earned by the people, businesses and government agencies whose purchases go into calculating growth, rose at a 2.3 percent annual rate from April through June.
By comparison, GDP expanded 3.6 percent from April through June before adjusting for inflation.