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Corporate spending on equipment, structures and intellectual property, decreased an annualized 2.2 percent after a 3.4 percent fall in the first quarter. Outlays for equipment dropped for the fourth time in the past five quarters. Spending on structures -- everything from factories to shops to oil rigs -- have increased in just one quarter since the end of 2014. Inventories and the trade gap are two of the most volatile components in GDP calculations. To get a better sense of demand in the U.S., economists look at final sales to domestic purchasers, or GDP excluding inventories and net exports. That measure increased 2.1 percent last quarter after a 1.2 percent gain. Also holding back economic growth in the second quarter was a decrease in residential investment, which fell at a 6.1 percent pace. That was the most since the third quarter of 2010 and marked the first decrease in two years. Government spending also shrank last quarter, declining 0.9 percent, the most in more than two years as outlays for the military fell. States and municipalities also cut back. The GDP report also showed price pressures remain limited. A measure of inflation, which is tied to consumer spending and strips out food and energy costs, climbed at a 1.7 percent annualized pace compared with 2.1 percent in the prior quarter. Fed policy makers, who left interest rates unchanged this week, said risks to the U.S. outlook have "diminished" and the labor market is getting tighter, suggesting conditions are turning more favorable for an increase in borrowing costs. U.S. Economy Grew Less-Than-Forecast 1.2% in Second QuarterSho ChandraIfU.S. households decide to work fewer hours and take more leisure time, which component of GDP is most likely to decrease as a result? A. net exports B. investment C. consumption D. government spending2. Based on the information in the article, does it appear that in early 2016 U.S. households in fact worked fewer hours and took more leisure time? What do the data suggest? According to the article (household consumption,hoisehold incomes, or unemployment) grew at an annualized rate of ( what) percent, a ( drop or jump ) compared to the recent past. This suggests that households worked (fewer) hours and took (less or more) leisure time

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Answer:

1. c. consumption

If US household decide to work fewer hours and take more leisure time, the component of GDP that is most likely to decrease is consumption and the households' income will decrease. Consumption in economics means the purchase of goods and services demanded by individuals in an economy and its occurs according to household income level.

2. The sentence that is required to know the growth rate of household consumption is Household consumption. Household consumption accounts for about 70% of the economy and grew at 4.2% annualized rate which is the biggest jump since the end of 2014.

Household consumption grew at an annualized rate of 4.2%, a jump compared to the recent past. This suggest household worked more hours and took less leisure time.

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