Real GDP growth came in at an annual growth rate of 1.9% for the second quarter (April-June), and the unemployment rate increased again, to 5.7% for July (up from 5.5% in June):
(GDP growth: blue line, left scale; unemployment: red line, right scale).
In the second quarter, GDP growth was driven by increases in exports (9% annual rate) and decreases in imports (-6.6%); hooray for the declining dollar! An increase in federal government purchases (6.7%) also gave a boost. New housing construction (a.k.a. "residential fixed investment," -15.6%) continued to plummet, and, while overall consumption was up, durable goods expenditures fell at a 3% annual rate (as reflected by the car industry's woes). As James Hamilton noted at Econbrowser, one silver lining in the report was a negative contribution from "inventory investment," which suggests firms have less stuff laying around and will need to produce more in the future.
The GDP release included the "annual revisions": now the BEA estimates that growth was indeed negative during the fourth quarter of last year (-0.2% vs. previously estimated 0.6% annual rate; this is not evident on the graph above since it plots % change from 1 year ago) and overall growth for 2007 is now pegged at 2.0% (previous estimate: 2.2%).
As for the labor market, this NY Times story about workers who are reduced from full- to part-time reminds us the unemployment rate does not tell the whole story. Brad DeLong recommends another series, "U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers," which the BLS explains:
Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.Based on this measure (above), which rose to 10.3% in July, DeLong calls a "recession."