The following is the unedited transcript of the news release from the U.S. Bureau of Economic Analysis.


Real gross domestic product - the output of goods and services produced by labor and property located in the United States - increased at an annual rate of 2.9 % in the second quarter of 2006, according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 5.6 %.

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the increase in real GDP was 2.5 %

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, nonresidential structures, exports, and state and local government spending that were partly offset by negative contributions from residential fixed investment and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the second quarter primarily reflected a deceleration in PCE for durable goods, downturns in equipment and software and in federal government spending, decelerations in exports and in PCE for nondurable goods, and a larger decrease in residential fixed investment that were partly offset by a deceleration in imports, an acceleration in PCE for services, and an upturn in private inventory investment.

Final sales of computers contributed 0.05 %age point to the second-quarter growth in real GDP after contributing 0.07 %age point to the first-quarter growth. Motor vehicle output subtracted 0.28 %age point from the second-quarter growth in real GDP after contributing 0.12 %age point to the first-quarter growth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 4.0 % in the second quarter, the same as in the advance estimate; this index increased 2.7 % in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 2.9 % in the second quarter, compared with an increase of 3.0 % in the first.

Real personal consumption expenditures increased 2.6 % in the second quarter, compared with an increase of 4.8 % in the first. Real
nonresidential fixed investment increased 4.7 %, compared with an increase of 13.7 %. Nonresidential structures increased 22.2 %, compared with an increase of 8.7 %. Equipment and software decreased 1.6 %, in contrast to an increase of 15.6 %. Real residential fixed investment decreased 9.8 %, compared with a decrease of 0.3 %.

Real exports of goods and services increased 5.1 % in the second quarter, compared with an increase of 14.0 % in the first. Real imports of goods and services increased 0.6 %, compared with an increase of 9.1 %.

Real federal government consumption expenditures and gross investment decreased 4.3 % in the second quarter, in contrast to an increase of 8.8 % in the first. National defense decreased 1.8 %, in contrast to an increase of 8.9 %. Nondefense decreased 9.3 %, in contrast to an increase of 8.5 %. Real state and local government consumption expenditures and gross investment increased 4.2 %, compared with an increase of 2.7 %.

The real change in private inventories added 0.63 %age point to the second-quarter change in real GDP, after subtracting 0.03 %age point from the first-quarter change. Private businesses increased inventories $58.7 billion in the second quarter, following increases of $41.2 billion in the first quarter and $43.5 billion in the fourth.

Real final sales of domestic product - GDP less change in private
inventories - increased 2.3 % in the second quarter, compared with an increase of 5.6 % in the first.


Gross domestic purchases

Real gross domestic purchases - purchases by U.S. residents of goods and services wherever produced - increased 2.3 % in the second quarter, compared with an increase of 5.3 % in the first.

Gross national product

Real gross national product - the goods and services produced by the labor and property supplied by U.S. residents - increased 2.6 % in the second quarter, compared with an increase of 6.1 % in the first. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which decreased $8.6 billion in the second quarter after increasing $14.4 billion in the first; in the second quarter, receipts increased $38.7 billion, and payments increased $47.3 billion.

Current-dollar GDP

Current-dollar GDP - the market value of the nation''s output of goods and services - increased 6.3 %, or $201.3 billion, in the second quarter to a level of $13,209.7 billion. In the first quarter, current-dollar GDP increased 9.0 %, or $277.9 billion.