ECONOMY SHRINKS BY 0.1 PERCENT IN SECOND QUARTER
WASHINGTON — The nation's output of goods and services decreased at a revised annual rate of 0.1 percent, or $1.1 billion, in the second quarter of 1991, the United States Commerce Department said yesterday.The performance of the real gross national product in the second quarter followed a decrease of 2.8 percent in the first quarter and a decrease of 1.6 percent in the fourth quarter of 1990, representing just the third time since 1946 the US economy contracted three quarters or more in a row. The Commerce Department earlier estimated the GNP grew 0.4 percent during the second quarter. The largest downward revisions were in inventory investment ($6.5 billion) and personal consumption expenditures ($5.1 billion), while the largest upward revisions were in net exports ($4.1 billion) and producers' durable equipment ($3.4 billion). In addition, the Commerce Department reported US corporate after-tax profits slipped 1.6 percent in the second three months of 1991, dropping to their lowest level since the third quarter of 1989. Corporate after-tax profits fell 1.6 percent for the second three months, to $163.7 billion, following a 6.3 percent fall in the first quarter. The fixed-weight GNP price index increased 3 percent in the second quarter, compared with a 5.2 percent increase in the first three months. The price index for gross domestic purchases, reflecting the prices paid domestically, advanced 2.3 percent in the second quarter, compared with an increase of 3.7 percent in the first quarter. The US economy last dropped at least three straight quarters during the final two quarters of 1974 and the first quarter of 1975. A four-quarter string of declines occurred in the last two quarters of 1953 and the first two of 1954.