(Bloomberg) -- US consumer spending advanced at half the pace as previously reported in the second quarter, largely due to weaker services outlays, according to government figures published Thursday.
Personal consumption, the main driver of the US economy, rose an annualized 0.8% in the April-to-June period, according to the third estimate of gross domestic product from the US Bureau of Economic Analysis. That compared with 1.7% in the previous estimate, and marked the weakest advance in over a year.
Overall GDP rose at an unrevised 2.1% rate during the period. Stronger business fixed investment helped offset the slowdown in consumer spending, advancing at a 7.4% pace versus the previously reported 6.1% estimate.
Net exports and inventories were also revised higher, no longer acting as a drag on growth.
While consumer spending slowed in the second quarter, it’s so far shown signs of resilience in the current one, leading Federal Reserve and Wall Street economists alike to grow more upbeat on near-term growth.
A gauge of the income generated and costs incurred from producing goods and services — gross domestic income — advanced 0.7% in the second quarter after a sizable upward revision to the first-quarter figures, the BEA figures showed. Averaging GDI and GDP, the economy grew 1.4% in each quarter.
The agency also issued its comprehensive benchmark update that included revisions to GDP going back a decade. The BEA also revised GDI figures back to 1979. During these updates, the government incorporates new data sources and refreshes its methodology.
The broader economic picture remained largely the same over the past few years, with a few noteworthy exceptions. Americans saved some $1.1 trillion less in the past six years than previously thought, and GDP growth was revised lower in 2022. Inflation, however, was hotter, with the personal consumption expenditures price index closing 2022 at a 4.1% annualized pace instead of the 3.7% reported before.
Read More: Americans Saved $1.1 Trillion Less Than Thought From 2017-2022
In the second-quarter figures, the PCE price index excluding food and energy — a gauge Fed officials watch closely — rose at an unrevised 3.7% pace in the second quarter. That marked the slowest pace of increase since early 2021.
The BEA data now also includes a calculation of core services prices excluding housing, a metric the Fed has put the spotlight on this year. That measure rose 3.5% annualized in the second quarter, representing the slowest pace since the end of 2020 and a sharp slowdown from the first three months of the year.
A separate report Thursday showed applications for unemployment benefits remained historically low last week.
--With assistance from Reade Pickert, Molly Smith and Cécile Daurat.
(Updates with chart.)
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