GDP shows US economy at 3.3 percent

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Gross domestic product numbers released on Wednesday by the US Commerce Department show that the economy in the United States grew by 3.3 percent in the second quarter of the year. The figures were considered healthy even though they were below the 3.4 percent growth predicted by the department a month ago. Growth was 3.8 percent in the first quarter of the year. In the second quarter, the GDP, which is the value of all goods and services produced in the US, was up to $11.1 trillion on an annualized basis and adjusted for inflation. Prices rose at a rate of 3.2 percent in the quarter, up from the first quarters rise of 2.4 percent, but when food and energy prices are excluded from the equation, prices rose only at a rate of 1.6 percent, compared to a rise of 2.4 percent in the first quarter. According to analysts, the main reason for the second-quarter decline is that businesses had to get rid of excess supply. Predictions are that growth in the current quarter, which runs from July to September, will exceed 4 percent, but that it will slow to about 3 percent in the fourth quarter as higher energy prices begin to take their toll. Analysts are divided over how Hurricane Katrina and its aftermath will affect economic growth. On one hand, rebuilding efforts will add to growth. Oil prices driven higher by damage to oil production facilities from the storm and the supply disruptions the closed facilities will cause, however, could hurt growth according to some analysts.