Economy dips at 0.7 percent pace in 2Q

WASHINGTON (AP) — The recession faded in the spring with economic activity shrinking at a pace of just 0.7 percent, a better-than-expected showing that buttressed beliefs the economy is growing now.

The small dip in gross domestic product for the April-June quarter follows the 6.4 percent annualized drop in the first three months of this year, the worst slide in nearly three decades. In the final quarter of last year, the economy sank at a rate of 5.4 percent

The new reading on second-quarter GDP, reported by the Commerce Department on Wednesday, shows the economy shrinking less than the 1 percent pace previously estimated. It also was better than the annualized 1.1 percent drop that economists were predicting.

The final revision of second-quarter GDP comes on the last day of the third quarter, in which many analysts predict the economy started growing again at a pace of about 3 percent.

Gross domestic product measures the value of all goods and services - from machines to manicures - produced in the U.S. It is the best estimate of the nation's economic health.