U.S. GDP Rebounds with 3.3% Growth

(BBC News)

The U.S. economy grew at a revised 3.3% annually in the second quarter of 2008, the Commerce Department said, much higher than its first estimate of 1.9%. The rebound was linked to strong U.S. exports, helped by the weak dollar, while government tax rebates also boosted consumer spending.

GDP grew at a rate of 0.9% in the first quarter, after a 0.2% contraction in the last three months of 2007. The Federal Reserve has warned the economy will remain weak this year.

Exports grew at an annualised rate of 13.2%, higher than the government’s initial estimate of 9.2%. Imports fell at a rate of 7.6% as the U.S. economic slowdown reduced demands for goods made overseas. The improved trade balance added 3.1 percentage points to second-quarter GDP, the biggest since 1980.

The slowdown in the housing market was evident, as builders cut back and businesses reduced their spending. Consumer spending, boosted by the government’s $600 tax rebate payments, rose by 1.7%, slightly higher than the previous quarter’s 1.5%.