GDP Slows Descent, Falls Just 1%

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. (More GDP stories.)