Bluefield Daily Telegraph, Bluefield, WV

National and World

July 27, 2012

US economic growth slowed to 1.5 pct. rate in Q2

WASHINGTON —

The U.S. economy grew at an annual rate of just 1.5 percent from April through June, as Americans cut back sharply on spending. The slowdown in growth adds to worries that the economy could be stalling three years after the recession ended.

The Commerce Department also said Friday that the economy grew a little better than previously thought in the January-March quarter. It raised its estimate to a 2 percent rate, up from 1.9 percent.

Growth at or below 2 percent isn't enough to lower the unemployment rate, which was 8.2 percent last month. And most economists don't expect growth to pick up much in the second half of the year. Europe's financial crisis and a looming budget crisis in the U.S. are expected to slow business investment further.

"The main take away from today's report, the specifics aside, is that the U.S. economy is barely growing," said Dan Greenhaus, chief economic strategist at BTIG LLC. "Along with a reduction in the actual amount of money companies were able to make, it's no wonder the unemployment rate cannot move lower."

Stocks opened higher as investors appeared to shrug off the weak U.S growth and focus on a pledge from the European Central Bank president to keep the euro together. The Dow Jones industrial average gained 70 points in the first hour of trading, and broader indexes also increased.

The lackluster economy is raising pressure on President Barack Obama in his re-election fight with Mitt Romney, the presumptive Republican presidential nominee.

But few think the Fed, the White House or Congress can or will do anything soon that might rejuvenate the economy quickly. Many lawmakers, for example, refuse to increase federal spending in light of historically large budget deficits.

Paul Dales, senior U.S. economist at Capital Economics, said that the sluggish second-quarter growth rate is probably not weak enough to trigger more action by the Federal Reserve when it meets next week.

Text Only
National and World
Local News
AP Video
Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Space X Launches to Space Station Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Raw: Church Tries for Record With Chalk Jesus Police Arrest Suspect in Highway Shootings Drought Concerns May Hurt Lake Tourism Vermont Goat Meat Gives Refugees Taste of Home Calif. Investigators Re-construct Fatal Bus Cras Appellate Court Hears Okla. Gay Marriage Case Horseless Carriage Introduced at NY Auto Show Chelsea Clinton Is Pregnant Beau Biden Plans 2016 Run for Del. Governor Flamingo Frenzy Ahead of Zoo Construction Obama: 8 Million Healthcare Signups Obama Hopeful on Ukraine, Will Watch Russians U.S. Sending Nonlethal Aid to Ukraine Military Holder: Americans Stand With KC Mourners
Sister Newspapers' News