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Economy Slowed Further In Second Quarter

Filed by KOSU News in Business.
July 27, 2012

The economy grew at a sluggish 1.5 percent annual rate in the second quarter, the Bureau of Economic Analysis reported this morning, down from a 2 percent pace in the first quarter.

This is the bureau’s first estimate of GDP growth in the spring months. It will revise the figure twice in coming months. It’s now 8:33 a.m. ET. We’ll have more from the report shortly.

Update at 8:50 a.m. ET. Early Analyses:

– “U.S. economic growth pulled back further during the second quarter of the year as consumer spending slowed–a reading that suggests domestic fiscal worries may becoming a more significant drag.” (The Wall Street Journal)

– “A softening job market prompted Americans to curb spending.” (Bloomberg News)

– Growth appears to be “slowing as expected … [but] defying fears of a more pronounced slowdown.” (Reuters)

– “The United States economy grew by a tepid 1.5 percent annual rate in the second quarter, losing the momentum it had appeared to be gaining earlier this year.” (The New York Times)

Update at 8:45 a.m. ET. How GDP Growth Has Varied In Recent Quarters.

GDP growth stalled in first-quarter 2011. Here’s a look at the latest estimates for quarters starting with those three months (figures show growth as seasonally adjusted annual rates):

– First-quarter 2011: 0.1 percent.

– Second-quarter 2011: 2.5 percent.

– Third-quarter 2011: 1.3 percent.

– Fourth-quarter 2011: 4.1 percent.

– First-quarter 2012: 2 percent.

– Second-quarter 2012: 1.5 percent.

Update at 8:42 a.m. ET. Reasons For The Ups And Downs:

According to the bureau, there was growth in the second quarter because of increases in consumer spending, exports and business investment.

But the reasons growth slowed included “decelerations” in consumer spending and business investment. So, while those key sectors did grow in the quarter, they didn’t grow as strongly as they had in the first quarter.

Update at 8:38 a.m. ET. First-Quarter Growth Estimate Increased Slightly:

The bureau’s latest figure on first-quarter growth — showing an increase at a 2 percent annual rate — is a small change from its previous estimate of growth at a 1.9 percent pace for the first three months of the year.

Our original post — “Did Economy Slow Further In Second Quarter? We Find Out Today”:

Expect to hear this morning that the U.S. economy slowed further in the second quarter, Bloomberg News says.

In advance of the 8:30 a.m. ET release from the Bureau of Economic Analysis of data on second-quarter gross domestic product growth, the news service says “a median forecast of 81 economists” shows they expect to hear there was growth at a 1.4 percent annual rate, down from a 1.9 percent pace in the first quarter.

That would also mean growth had cooled to the slowest pace since second-quarter 2011, when it grew at a 1.3 percent annual rate.

In the often hard-hearted world of Wall Street, a report showing slower growth is being viewed this morning as potentially good news. According to The Wall Street Journal, “U.S. stock futures traded essentially unchanged Friday as investors awaited data expected to confirm a further economic slowdown in the second quarter that bulls hope will spur more monetary stimulus.”

We’ll update this post with news from the report after it is released. [Copyright 2012 National Public Radio]

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