U.S. real GDP growth last quarter was revised back to 2.6% (AR) from the preliminary report of 2.9% and the advance report of 2.5% growth. The figure fell short of Consensus expectations for an unrevised 2.9% advance.

Growth in 2Q corporate profits was revised down to 1.4% (18.5% y/y) from the initial report of a 3.2% advance. Profits at U.S. nonfinancial corporations fell a revised 3.6% (+10.7% y/y) instead of rising 0.6%. Financial corporate profits grew a stronger 9.4% (29.6% y/y) and earnings of overseas corporations grew a stronger 6.1% (29.5% y/y).

A lessened contribution from inventories, back to 0.4% from 0.6%, was the source of most of the downward revision to 2Q GDP growth. The contribution from an improved net export deficit was unrevised at 0.4 percentage points though exports grew a somewhat stronger 6.2% (8.2% y/y) and imports rose 1.4% (6.4% y/y).

Growth in final sales to domestic purchasers was notched down slightly to 1.6% (3.0% y/y) as the decline in residential investment was deepened to 11.1% (-1.5% y/y) and that reduced 2Q GDP growth by 0.7 percentage points.

Real personal consumption expenditures was unrevised at 2.6% (3.0% y/y) while growth in business fixed investment was revised slightly lower to 4.4% (7.2% y/y).

The rise in the GDP chain price index was unrevised at 3.3%. Less final sales of computers the chain price index grew 3.5% (3.4% y/y). The chain price index for residential investment grew 2.9% (5.0% y/y), down from a peak quarterly rate of growth of 10.5% in early 2004.

Barreling Down the Road To Recession? from the Federal Reserve Bank of St. Louis can be found here.