2nd quarter GDP revised a tick downward

The U.S. economy grew a bit less than previously thought in the April-June period, according to a report out Friday.

The gross domestic product, the sum of all goods and services produced nationwide, was revised down three tenths of 1 percent to a yearly rate of 1 percent in the second quarter.

Economists blamed the slower growth on less international trade and businesses ordering fewer supplies. However, some were encouraged by a better-than-expected increase in consumption, particularly consumer spending, which accounts for 70 percent of all commercial activity.

"This is a disappointing number . . . but the tighter inventories may be temporary, largely because of disruptions caused by the earthquake and tsunami in Japan," said Jerry Webman, chief economist for Oppenheimer investment funds. "It doesn't appear to me that we're in a recession now, but the lack of momentum is of concern."

On Long Island, fiscal experts said lower second-quarter GDP wasn't a surprise because of the impact rising gasoline prices had on shoppers.

"The increase in gas prices had a lot to do with the slowdown," said Edward Gullason, an economics professor at Dowling College in Oakdale who worked for the White House's Council of Economic Advisers under former President Ronald Reagan.

He also expressed concern that talk of another recession "is scaring people into spending less money, which could do a lot of damage and cause another recession."

The arbiter of business cycles, the National Bureau of Economic Research, dates the last downturn from December 2007 through June 2009. A recession is defined as two consecutive quarters of negative GDP.

The U.S. economy nearly stalled during January-March, expanding by only 0.4 percent. Experts peg healthy GDP growth at 3.2 percent.

Gus Faucher, macroeconomics director at forecasting service Moody's Analytics, was encouraged by the 3 percent increase in corporate profits quarter over quarter and more than 8 percent compared with a year ago.

"Firms have the money to hire; it is a question of their willingness to do so," he said. "If they have confidence, they will hire more workers. This, in turn, will give consumers more confidence, and they will start to spend more."