Economy up 2.3%; 1st quarter revised higher

  • Los Angeles Times
  • Thursday, July 30, 2015 5:08pm
  • Business

WASHINGTON — The U.S. economy rebounded this spring with annualized growth of 2.3 percent, and new data indicated that there was no contraction in the first quarter after all, the Commerce Department said Thursday.

The modest second-quarter figure – the first of three estimates by the government – fell short of economists’ forecasts of 2.9 percent annualized growth.

But that disappointment was partly offset by a significant upward revision to first-quarter growth.

Total economic output, also known as gross domestic product, increased at a 0.6 percent annualized rate from January through March, the Commerce Department said in its final estimate for the quarter.

That was a major improvement from the 0.2 percent annualized contraction in a report last month.

Taken together, the new data indicate that the economy expanded at about a 1.5 percent annual rate in the first half of the year. The weak performance is well below the economy’s potential and worse than last year’s tepid 1.9 percent first half growth.

Economists said unusually bad winter weather and a labor dispute at West Coast ports slowed first-quarter growth this year. However, the hit was not nearly as bad as initially believed.

The Commerce Department first estimated that the economy contracted at a 0.7 percent annual rate in the first quarter, a figure that now has been revised upward twice.

Noting other first-quarter slowdowns in recent years, some analysts suggested that there were problems with the Commerce Department’s seasonal adjustments.

On Thursday, as part of its annual revisions of data, the department’s Bureau of Economic Analysis said it was introducing new seasonal adjustment methods for key inputs such as federal defense spending and consumer spending on services.

The revisions also showed that growth was weaker from 2011-2014 than originally reported.

The economy expanded at an average annual rate of 2 percent during that period, down from an earlier estimate of 2.3 percent.

The improved growth in this year’s second quarter was fueled by an increase in exports, consumer purchases and spending by state and local governments.

Exports, which have been hurt by a rising dollar, increased 5.3 percent from April through June after they had plunged 6 percent in the first quarter.

Consumer spending rose 2.9 percent in the second quarter, up from a weak 1.8 percent rise in the previous quarter, and state and local governments increased their spending by 2 percent after a 0.8 percent decrease in the first quarter.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.