American growth slows to 2.2%
Source: Agencies |
April 28, 2012, Saturday
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Print Edition
Print Edition
THE US economy grew more slowly in the first three months of this year. Governments spent less, and businesses cut back on investment. But consumers spent at the fastest pace in more than a year.
The result suggests that the economy will continue to expand, slowly but steadily.
The US Commerce Department yesterday said the economy grew at an annual rate of 2.2 percent in the January-March quarter, compared with a 3 percent gain in the final quarter of last year. In 2011, the economy expanded just 1.7 percent. But growth is expected to rebound to around 3 percent for all of 2012 as stronger job growth spurs more consumer spending.
The economy is by far the biggest issue in this year's presidential campaign, with Republican challenger Mitt Romney hammering at President Barack Obama's record at handling the slow recovery.
Consumer spending accelerated to an annual rate of 2.9 percent in the first quarter. The strength came from a second robust quarter of growth in auto purchases. Consumer spending is closely watched since it accounts for 70 percent of economic activity.
All levels of government are under pressure as they struggle to control budget deficits. Government spending fell at an annual rate of 3 percent in the first quarter.
And investment in equipment and software rose at just a 1.7 percent annual rate. That was the slowest pace since the Great Recession ended in mid-2009.
The 2.2 percent overall increase in the economy in the period marked the 11th consecutive quarter gross domestic product has expanded since the 2007-2009 recession ended in June 2009. But the gains have been below usual increases coming out of a deep recession.
Many economists predict growth will strengthen in the second half of this year because they think hiring will continue to improve. Job growth has helped drive the unemployment rate to 8.2 percent in March.
The result suggests that the economy will continue to expand, slowly but steadily.
The US Commerce Department yesterday said the economy grew at an annual rate of 2.2 percent in the January-March quarter, compared with a 3 percent gain in the final quarter of last year. In 2011, the economy expanded just 1.7 percent. But growth is expected to rebound to around 3 percent for all of 2012 as stronger job growth spurs more consumer spending.
The economy is by far the biggest issue in this year's presidential campaign, with Republican challenger Mitt Romney hammering at President Barack Obama's record at handling the slow recovery.
Consumer spending accelerated to an annual rate of 2.9 percent in the first quarter. The strength came from a second robust quarter of growth in auto purchases. Consumer spending is closely watched since it accounts for 70 percent of economic activity.
All levels of government are under pressure as they struggle to control budget deficits. Government spending fell at an annual rate of 3 percent in the first quarter.
And investment in equipment and software rose at just a 1.7 percent annual rate. That was the slowest pace since the Great Recession ended in mid-2009.
The 2.2 percent overall increase in the economy in the period marked the 11th consecutive quarter gross domestic product has expanded since the 2007-2009 recession ended in June 2009. But the gains have been below usual increases coming out of a deep recession.
Many economists predict growth will strengthen in the second half of this year because they think hiring will continue to improve. Job growth has helped drive the unemployment rate to 8.2 percent in March.
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