The US economy contracted at a slower-than-expected pace in the second quarter as the slump in business and residential investment moderated sharply.
Gross domestic product, which measures total goods and services output within US borders, fell at a 1.0% annual rate, the US Commerce Department said.
But GDP tumbled 6.4% in the January-March quarter, the biggest decline since a matching fall in the first quarter of 1982. It was previously reported as a 5.5% drop.
With the contraction in the second quarter, US GDP has fallen for four straight quarters for the first time since US government records started in 1947.
Analysts polled by Reuters had forecast GDP falling at a 1.5% rate in the second quarter.
The advance report showed business investment decreased at an 8.9% rate in the second quarter after diving 39.2% in the previous quarter. Investment in non-residential structures fell at an 8.9% rate compared to a 43.6% drop in the first quarter.
Residential investment, which is at the core of the longest recession since the Great Depression, dropped at a 29.3% rate in the April-June period after plummeting by 38.2% in the first quarter.
Business inventories continued to be a drag on overall GDP, declining by a record $141.1 billion in the second quarter as firms aggressively cut back on new production to reduce stockpiles of unsold goods. Inventories fell by $113.9 billion in the first quarter.
The drop in inventories shaved 0.8% from second-quarter GDP. Excluding inventories, GDP fell 0.2% in the second quarter compared to a 4.1% decline in the first quarter, the department said.
Consumer spending, which accounts for over two-thirds of US economic activity, fell at a 1.2% rate in the second quarter after rising 0.6% in the previous quarter.
The freefall in exports braked sharply in the second quarter. Exports fell at a 7.0% rate after plunging 30% in the first quarter. There were positive contributions from the federal, state and local government during the second quarter.
Annual benchmark revisions issued by the department showed the economy barely grew in 2008, expanding at an annual rate of 0.4%, the smallest since 1991, instead of the 1.1% previously estimated.
