GDP Slows Descent, Falls Just 1%
By Kevin Spak,  Newser Staff
Posted Jul 31, 2009 8:00 AM CDT
People exit work in the financial district October 30, 2008 in New York City.   (Getty Images)
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(Newser) – The US economy contracted in the second quarter, but it was a mild decline that beat analyst estimates, Bloomberg reports. GDP fell 1%, less than the 1.5% economists predicted, and a heck of a lot less than the 6.4% and 5.4% drops seen in the two previous quarters. “We’re well on our way to a recovery,” says one economist. “But, inevitably, it’ll be choppy.”

Today’s report wasn’t all good. Compared to last year, GDP is down 3.9%, the biggest year-over-year drop since records began in 1947. Consumer spending, which makes up 70% of the economy, fell twice as much as forecast, and with job losses mounting, won’t recover quickly. But rising business spending and a shrinking trade gap helped offset those declines.