The American economy shrank this spring exactly as much as first reported, the government said on Thursday, leaving intact its original estimate that gross domestic product declined at an annual rate of 1 percent.
The revised report did show that businesses cut their inventories more deeply than the government had said in its initial quarterly assessment of G.D.P., which is a broad measure of economic output. But that decline was balanced out by smaller declines in consumer spending and a surge in federal government spending from the stimulus and other measures.
The government generally revises its first estimate of G.D.P, and the second draft can show far more weakness than its first projections. For example, the government’s first report on economic activity after a wrenching fourth quarter of 2008 said the economy had contracted by 3.8 percent; the final figure was a 5.4 percent contraction.
So for many economists, Thursday’s numbers were good news that presaged the end of the recession.
“No revision’s a good number,” said Joel Naroff, president of Naroff Economic Advisors. “People were worried that it would turn out the decline was worse than we thought. At this point, a 1 percent decline is really minimal. It really is telling us the recession lost steam almost completely during the spring.”
Economists had been expecting a downward revision to a 1.5 percent contraction. Thursday’s report said that businesses cut their inventories by $159.2 billion in the second quarter, suggesting that they were still racing to cut their costs and reduce their stockpiles of goods. But economists said the steeper cuts in inventory reduction could set the stage for a rebound in the last half of the year if production begins to tick up again.
Consumer spending fell at a rate of 1 percent, slightly less than originally reported./.