- The Washington Times - Thursday, August 27, 2009

The Commerce Department confirmed Thursday that gross domestic product (GDP) declined at an annual rate of just 1 percent during the April-June period. GDP had plunged at annual rates of 5.4 percent in the fourth quarter of last year and 6.4 percent during the first quarter.

The much slower decline in GDP during the spring indicated that the economy was about to emerge from its steepest downturn in seven decades. GDP has now fallen four quarters in a row. Cumulatively, it has declined by 3.9 percent, its biggest descent in post World War II history.

Corporate profits increased 5.7 percent during the second quarter compared to the January-March period. It was the biggest upturn since the first quarter of 2005, the Commerce Department reported. Profits were still 10.9 percent below their year-earlier levels.

Most economists expected the Commerce Department to revise the second-quarter decline downward to about 1.5 percent because inventories fell more than previously reported. The inventory decline was steeper, but that was offset by other revisions.

Government spending, for example, jumped at a 6.4 percent annual rate. That was faster than the 5.6 percent pace first reported, and it was the fastest rate of increase in seven years. Trade activity added 1.6 percentage points to second-quarter growth, more than reported last month.

Instead of declining 1.2 percent, as first reported, consumer spending fell just 1 percent last quarter.

In labor market news, fewer American workers filed first-time claims for unemployment benefits last week, providing more evidence that the longest economic downturn since the Great Depression is easing.

Initial claims for jobless benefits declined 10,000 to 570,000 for the week ending Aug. 22, the Labor Department reported Thursday.

Continuing claims for jobless benefits provided by state programs fell by 119,000 to 6.13 million for the week ending Aug. 15. Continuing claims are now at their lowest level since April.

State programs normally provide benefits for 26 weeks, after which unemployed workers can apply at the federally funded Extended Benefits program or the Emergency Unemployment Compensation (EUC) program. Workers collecting Extended Benefits increased by 64,000 to 465,000 for the week ending Aug. 8, while an additional 38,000 workers qualified for EUC benefits that week, bringing its total participation to 2.9 million.

Altogether, more than 10 million workers were collecting jobless benefits for the week ending Aug. 8, the Labor Department reported.

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