Commerce Department Revises Second Quarter GDP Backward

U.S. economic growth was slower in the second quarter than previously estimated, according to a report released Friday by the Department of Commerce.

The Bureau of Economic Analysis claims gross domestic product expanded at a yearly rate of 1 percent during the second quarter, down significantly from the 1.3 percent the government originally projected.

However, August consumer sentiment was revised upward, according to Thomson Reuters and the University of Michigan, despite remaining in troubling territory. That consumer sentiment index was risen to 55.7, up from the original projection of 54.9.

"While confidence indicators have plummeted of late, the most timely hard economic numbers certainly do not suggest that the economy has fallen back into a recession," Harm Bandholz, chief U.S. economist at UniCredit Research, told Reuters. "Instead, we still continue to expect that growth in the second half of the year will accelerate to about 2 percent."

A poll of Bloomberg economists projected earlier this year that consumer spending will drive economic growth later in 2011, but as activity in this sector continues to be revised, the recovery appears as elusive as ever.