WASHINGTON, Sept 28: The US economy grew at a 2.6 per cent pace in the second quarter, the government said on Thursday in its final estimate of growth, revising downward a previous estimate of 2.9 per cent.

The report confirmed a sharp cooling from the first quarter, when GDP was up at a robust 5.6 per cent annualised rate.

The final figure for the second quarter was weaker than the 2.9 per cent figure expected by financial markets.

The report equates to an annualised output of goods and services of $13.2 trillion.

The Commerce Department said the change in the estimate “primarily reflected a downward revision to private inventory investment, an upward revision to imports of services and a downward revision to residential fixed investment that were partly offset by an upward revision to (spending) for services.” The report also noted weakness in the auto sector, which has been retrenching.

“Motor vehicle output subtracted 0.31 percentage point from the second-quarter growth in real GDP after contributing 0.12 percentage point to the first-quarter growth.” On the inflation front, a price index linked to GDP showed a 4.0 per cent increase from a year ago, compared with a prior estimate of 4.1 per cent.

Core prices, excluding food and energy, were up 2.7 per cent year-over-year, down from the estimate last month of 2.8 per cent.

The report showed final sales -- which represent growth excluding inventory -- were up 2.1pc in the second quarter, compared with a 5.6pc rise in the first.

Consumer spending was up 2.6 per cent for the quarter, remaining the main driver of economic growth, even though it was down from a 4.8 per cent rise in the prior quarter.—AFP