The Commerce Department reported Friday that gross domestic product, or GDP, increased at a 2.8 percent annual rate in the April-June period. That wasn't as strong as the 3.3 percent growth estimate made a month ago.
But it did mark a pickup after two terrible quarters. The economy barely grew in the first quarter — advancing at a feeble 0.9 percent pace. In the final quarter of last year, the economy actually shrank.
Nonetheless, the lower reading for second-quarter GDP surprised economists who had been expecting the government to stick with the 3.3 percent growth estimate.
The main reasons behind the downgrade: Consumer spending and U.S. exports didn't grow as much during the spring as previously thought. Yet export growth was still very brisk, a key factor keeping the economy afloat. And, consumers were helped out by the government's tax rebates. Associated Press
Microsoft Corp., Cisco Systems Inc. and computer makers may lose $4.3 billion in orders next year as the credit crisis forces financial companies to cut spending to the lowest level since 2000.
Finance-industry technology outlays will sink 20 percent to $17.6 billion next year from an estimated $21.9 billion in 2008, said Larry Tabb, founder of Tabb Group in New York, which tracks securities firm budgets.
Lehman Brothers Holdings Inc.'s bankruptcy and Bank of America Corp.'s purchase of Merrill Lynch & Co. mark the beginning of stark spending cuts. More than 20 percent of global technology spending comes from the finance industry, said researcher Gartner Inc.
Lehman's bankruptcy and the subsequent takeover of some units by Barclays Plc may reduce the firm's budget for computer spending to $1 billion next year from $2.5 billion. Bloomberg News
Newspaper publisher McClatchy Co., publisher of the Charlotte Observer, has restructured its agreement with lenders in response to declines in advertising revenue.
McClatchy said Friday the amendment to its $1.175 billion credit facility will give it greater flexibility. Associated Press