US economic growth estimate for 2nd quarter cut to 1.1%

The Commerce Department slightly cut its estimate of US economic growth in the second quarter to 1.1 percent Friday, underscoring the surprise weakness in activity during the period.

The 0.1 percentage point cut to the initial estimate of the annual expansion rate came on the back of more complete data that showed lower state and local government spending and higher imports than initially estimated.

But in an encouraging sign for growth in the current quarter, personal expenditures and business investment were both revised higher.

But the revisions were small, the Commerce Department said, adding that "the general picture of economic growth remains the same."

In the same report, the department said that US corporate profits fell by $24.1 billion in the second quarter after a $66 billion increase in the first, and were down 4.9 percent from a year earlier.

Banks and other financial institutions saw significant gains in the quarter but those were offset by a sharp fall in profits at non-financial corporations.

The slight downward revision in growth for the period was expected and economists generally forecast a solid rebound to an annual pace of close to three percent in the current quarter.