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THE LATEST SECONDARY MARKET creased $107.6 billion, most of which—$60.3 billion—was an in- crease in personal consumption. The second-quarter increase In dollar terms, GDP in- in personal consumption though was less than half the $133.4 bil- lion growth in the first quarter. Government spending at all levels fell $6.2 billion in the second quarter compared with a $3.6 billion increase in the first. State and local government spending dropped $8.7 billion in the second quarter offset by a $2.5 increase in federal spending. The slowdown in total growth was due to a combination of fac- tors: Real personal consumption grew at just 1.5 percent in the second quarter compared with 2.4 percent in the first. Non-residential fixed invest- ment grew at 5.3 percent in the second quarter compared with 7.5 percent in the first. Residential fixed investment grew 9.7 percent in the second quarter after growing at 20.5 percent in the first. Released less than a month GDP Growth Declines on Lackluster Spending With the Labor Department tallying a 1.5 percent drop in the nation's GDP, economists say a loss in consumer spending is to blame. T Department reported recently, down from an upwardly revised 2 percent growth rate in the first quarter but better than expected. Economists had forecast he U.S. economy grew at a disappointing 1.5 percent in the second quarter, the Labor GDP to grow at 1.2 percent in the second quarter. A drop in government spending—primarily at the state and local level—held growth down. The growth pace is below the the same quarter, which saw the weakest job growth—225,000 jobs—since the third quarter of 2010 when the economy grew at a relatively robust 2.5 percent. The Labor report was an "advance estimate" based on in- complete data subject to revision or in some cases data that has not yet been reported. The Labor Department also mixed compared with initial re- ports: stronger than first reported in the second and fourth quarters but weaker in the first and third. Between 2008 and 2011, real Data for 2011 were generally 3 percent level needed to add jobs to make a dent in the na- tion's unemployment rate. Indeed, the GDP report covered released the regular annual revisions to GDP for the previous three years, from the end of 2008. Those revisions showed a timates, real GDP had increased at an average annual rate of 0.4 percent. From the fourth quarter of steeper plunge in the first half of 2009 than previously reported but also stronger growth in the first half of 2010 than first calculated. GDP increased at an average an- nual rate of 0.3 percent, Labor said. In the previously published es- after the end of the quarter, this advance estimate of GDP relied on estimates and assumptions of some key data elements that, Labor said, "are incomplete and subject to revision." Labor assumed, for example, a stronger pace of residential construction for June than for April and May as well as a drop in non-durable manufacturing in- ventories, an increase in automo- bile inventories, and decreases in both exports and imports. Personal consumption repre- sented 71 percent of total GDP in the second quarter compared with 71.1 percent in the first. Inflation according to the GDP price index increased to a 1.9 percent annualized rate from 1.8 percent in the first quarter. Core inflation—excluding food 2008 to the first quarter of 2012, real GDP increased at an average annual rate of 1.5 percent, slightly faster than the previously pub- lished estimates, which pegged real GDP growth at 1.4 percent. and energy prices—dropped to 1.8 percent in the second quarter from 1.9 percent in the first. Labor issues three GDP reports for each quarter: an "advance" report one month after the quarter ends and revisions in each of the following months as more data are received. THE M REPORT | 75 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET