The economy contracted by one percent, less than analysts expected, in the second quarter of 2009, between April and June, and initial jobless claims also fell last week, providing two good indicators that the third quarter is shaping up to mark the official end of the Great Recession. Today's GDP report is the second estimate of second-quarter growth (a third will come in September), and while the economy shrank for four consecutive quarters for the first time since records began in 1947, the vast improvement from Q1's negative-6 percent plunge suggests that the corner is finally being rounded. Graphs after the jump:
Consumer spending, which accounts for about 70 percent of the economy, fell at a 1 percent pace, less than anticipated, following a 0.6 percent increase in the prior quarter. The decrease subtracted 0.7 percentage point from GDP. Purchases were forecast to drop 1.3 percent, according to the survey median.
Turning to the day's unemployment news, Calculated Risk points out that initial jobless claims are still way, way too high to start looking for a ceiling. If we assume that four week average of weekly jobless claims will have to hit 400,000 for the unemployment rate to top out, it's alarming that we're still hovering in the high 500Ks -- and have been there, at least, for the last seven months.