By Courtney Schlisserman
Aug. 28 (Bloomberg) -- The U.S. economy probably grew in the second quarter at a faster pace than previously projected, led by a jump in exports, economists said ahead of a government report today.
Growth accelerated to a 2.7 percent annual rate from April through June, up from an advance estimate of 1.9 percent issued last month, according to the median of 78 economists surveyed by Bloomberg News. Gross domestic product rose at a 0.9 percent rate in the first three months of the year.
Record exports and the temporary stimulus from the tax rebates prevented the economy from shrinking as housing slumped and companies slashed inventories and bought less equipment. Consumer spending is now waning and slower growth abroad dims the outlook for foreign sales, signaling last quarter will be the year's highpoint.
``The second quarter GDP numbers will mark the economy's last hurrah,'' said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. ``Exports will continue to expand, but at a much slower pace.''
The Commerce Department's report is due at 8:30 a.m. in Washington. Survey estimates ranged from 2.2 percent to 3.1 percent.
Separately, initial jobless claims will remain near a six- year high, indicating the job market has weakened, economists forecast a Labor Department report at the same time will show. Applications fell to 425,000, from 432,000 a week earlier, according to the survey median. Claims totaled 457,000 in the week ended Aug. 1, the most since March 2002.
Fed Forecast
Private economists aren't the only ones taking a dimmer view. Federal Reserve staff also ``marked down'' the central bank's forecast for growth in the second half of 2008, according to minutes of the Federal Open Market Committee's Aug. 5 meeting released earlier this week.
A weakening labor market is one reason consumer spending is likely to slow after the government sent out about $92 billion in tax rebate checks. The U.S. has lost 463,000 jobs so far this year and wages haven't kept up with inflation, according to Labor Department data.
The longest expansion in consumer spending on record will probably end this year, according to economists surveyed by Bloomberg earlier this month. Retail sales fell in July for the first time in five months, led by a slump in auto purchases, according to Commerce data.
``With the rebate payouts completed for all practical purposes, we expect the boost to go away and consumption to decline over the next several months, reflecting still-high gasoline prices, the credit crunch, and slowing employment,'' Goldman Sachs economist Seamus Smyth said in a note to clients.
Less Profit
Pacific Sunwear of California Inc., the owner of the PacSun clothing chain, said Aug. 21 that it may earn less in the third quarter than analysts had forecast. The company cited a ``difficult environment and challenging retail conditions in some of the company's key markets.''
The shrinking trade gap has contributed to economic growth for more than a year, culminating in a 2.4 percentage-point boost last quarter that was the biggest since 1980. The economy would have contracted at a 0.5 percent pace without the help.
The biggest jump in exports in more than fours years caused the trade deficit to unexpectedly narrow in June, Commerce reported earlier this month. Adjusted for inflation, the gap was the smallest since December 2001. Those figures were not available when the government's advance GDP estimate was issued on July 31.
The boost from trade may wane the rest of the year as growth among some of the U.S.'s biggest trading partners slows. Europe and Japan both shrank last quarter.
Bloomberg Survey
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GDP Personal Initial
Annual Consump. Claims
QOQ% QOQ% ,000's
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Date of Release 08/28 08/28 08/28
Observation Period 3Q P 3Q P Aug. 23
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Median 2.7% 1.6% 425
Average 2.7% 1.6% 427
High Forecast 3.1% 1.9% 450
Low Forecast 2.2% 1.5% 410
Number of Participants 78 7 40
Previous 1.9% 1.5% 432
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4CAST Ltd. 2.8% --- 420
Action Economics 2.8% --- 410
AIG Investments 2.8% --- ---
Aletti Gestielle SGR 2.9% 1.6% 430
Allianz Dresdner Economic 2.7% --- ---
Argus Research Corp. 2.6% --- ---
Banc of America Securitie 2.6% --- ---
Bank of Tokyo- Mitsubishi 2.8% --- 427
Barclays Capital 2.7% --- 430
BBVA 3.0% --- ---
BMO Capital Markets 2.7% --- 425
BNP Paribas 2.8% --- 420
Briefing.com 2.8% --- ---
Calyon 2.7% --- ---
CFC Group 2.5% 1.6% 435
CIBC World Markets 2.8% --- ---
Citi 2.8% --- 430
ClearView Economics 2.4% --- ---
Commerzbank AG 2.5% --- 450
Credit Suisse 2.8% --- 410
Daiwa Securities America 2.6% --- ---
Danske Bank 2.5% --- ---
DekaBank 2.8% --- ---
Desjardins Group 2.3% --- 425
Deutsche Bank Securities 2.9% --- ---
Deutsche Postbank AG 2.3% --- ---
Dresdner Kleinwort 2.9% --- ---
DZ Bank 2.5% --- ---
First Trust Advisors 2.8% --- 429
Fortis 2.6% --- ---
FTN Financial 2.2% --- ---
Global Insight Inc. 2.7% --- ---
Goldman, Sachs & Co. 2.5% --- ---
H&R Block Financial Advis 2.8% 1.5% 415
HBOS Treasury Services 2.8% --- 450
Helaba 2.5% --- ---
High Frequency Economics 2.4% --- ---
Horizon Investments 2.3% --- ---
HSBC Markets 2.8% --- 420
IDEAglobal 2.8% 1.9% 445
Informa Global Markets 2.9% --- 440
ING Financial Markets 2.4% --- 430
Insight Economics 3.0% --- 425
Intesa-SanPaulo 2.5% --- ---
J.P. Morgan Chase 2.7% --- 420
Janney Montgomery Scott L 2.6% 1.5% ---
Landesbank Berlin 2.5% --- 425
Landesbank BW 3.1% --- ---
Lehman Brothers 2.9% --- 420
Lloyds TSB 2.8% --- 415
Maria Fiorini Ramirez Inc 2.7% --- 430
Merk Investments 2.7% --- ---
Merrill Lynch 2.3% --- 430
Moody's Economy.com 2.7% --- 420
Morgan Stanley & Co. 2.5% --- ---
National City Corporation 2.7% --- ---
Natixis 2.5% --- ---
Newedge 2.6% 1.6% ---
Nomura Securities Intl. 2.6% --- ---
Nord/LB 2.5% --- 425
PNC Bank 2.8% --- ---
RBS Greenwich Capital 2.7% --- ---
Ried, Thunberg & Co. 2.6% --- 425
Schneider Trading Associa 2.6% 1.7% 425
Scotia Capital 2.7% --- 445
Societe Generale 2.5% --- ---
Stone & McCarthy Research 2.9% --- 425
TD Securities 2.7% --- 420
Thomson Financial/IFR 2.5% --- 430
Tullett Prebon 2.8% --- 435
UBS Securities LLC 2.8% --- 425
Unicredit MIB 2.8% --- 430
University of Maryland 2.6% --- ---
Wachovia Corp. 2.9% --- ---
Wells Fargo & Co. 2.8% --- 410
WestLB AG 2.5% --- ---
Westpac Banking Co. 3.0% --- 425
Wrightson Associates 2.6% --- 425
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To contact the report on this story: Courtney Schlisserman in Washington Cschlisserma@bloomberg.net
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