Dados EUA (13:30) : Growth less than expected

[notiCIas]

Second-quarter GDP revised higher but just shy of forecasts; key inflation reading lower.

August 30 2006: 10:14 AM EDT


WASHINGTON (Reuters) -- The economy grew more rapidly than originally reported in the second quarter but an inflation gauge was slightly lower, a government report said Wednesday, suggesting the Federal Reserve may be able keep interest rates steady.

"Overall we are seeing softer inflationary pressures," said Kathy Lien, chief strategist at Forex Capital Markets in New York.


U.S. Treasury debt prices and the dollar were little changed after the report. U.S. stock index futures edged higher.

The U.S. economy grew at a 2.9 percent annual pace in the second quarter, faster than first reported but less of an upward revision than expected, as higher business investment offset a drop in residential construction, a Commerce Department report showed.

Analysts polled by Reuters were expecting the second pass at GDP estimates for the April-June quarter to be revised up to a 3 percent annual pace from the initial 2.5 percent estimate for the quarter released last month.

A separate report by a private employment services group showed private sector employers adding 107,000 jobs in August.

Stocks crept higher at the open Wednesday as investors welcomed a report showing strong, but not too strong economic growth, but held back after a two-session advance.

On Wall Street, stocks struggled to hold early gains after the news while Treasury bond prices crept higher.

Growth in the second quarter was the slowest quarterly U.S. growth pace, setting aside the Hurricane Katrina-affected final quarter of last year, since a 2.6 percent gain in the fourth quarter of 2004, on the biggest decline in homebuilding in more than ten years, the Commerce Department said.

At the same time, an inflation gauge favored by the Federal Reserve - a measure of personal consumption expenditure prices minus food and energy - was revised slightly downward to a 2.8 percent gain from an originally reported 2.9 percent rise. The last time there was an equivalent rise in the category was in the first quarter of 2001.

The report "kind of eradicates the likelihood that the Fed will have to resume rate hikes any time soon," Lien said.

Businesses spent more on buildings, plants and factories than originally thought in the second quarter. The 22.2 percent rise was the biggest gain in nonresidential fixed investment in structures since the second quarter of 1994.

However, in a sign the housing sector is cooling rapidly, investment on residential structures fell 9.8 percent, the biggest decline since a 12.2 percent fall in the second quarter of 1995, the Commerce Department said.

Investment in inventories, exports, and spending by state and local governments were also higher than first thought.

But business investment in equipment and software was revised to a larger decline of 1.6 percent, the biggest drop since the fourth quarter of 2002.

Corporate profits after taxes rose 2.1 percent in the second quarter, a much smaller gain than the 14.8 percent rise in the first three months of the year.

The Federal Reserve has been counting on a slowdown in economic growth to keep inflation in check. Minutes of the Fed's Aug. 8 meeting - when the Fed halted a two-year string of interest rate increases - showed policy-makers concerned about rising prices but patient on the need for more rate hikes as they awaited further economic data.

The ADP Employer Services report showing 107,00 new jobs comes two days before the government's nonfarm payrolls data, which are expected to show 120,000 new jobs in the month, up from 113,000 in J