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US rises slightly faster in Q2
Source: Agencies |
September 30, 2011, Friday
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Print Edition
THE United States economy grew slightly faster in the spring than previously estimated but remained dangerously weak in the face of high unemployment and higher gas prices. Many economists foresee slightly better growth in the current July-September quarter.
The annual growth rate was 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago, the Commerce Department said yesterday. The improvement reflected modestly more consumer spending and a bigger boost from trade.
Even with the upward revision, the economy grew at an annual rate of just 0.9 percent in the first six months. That's the weakest six-month performance since the recession ended more than two years ago.
Though most economists don't expect another slump, they don't see growth accelerating enough to lower the jobless rate, which was 9.1 percent in August. Many predict a rebound to growth of 2 percent to 2.5 percent in the current quarter.
A forecasting panel for the National Association for Business Economics predicts total growth for the year will be just 1.7 percent. In January, most economists had predicted 3 to 4 percent growth for the entire year. A Social Security tax cut gave Americans an extra US$1,000 to US$2,000 in after-tax income. That was expected to buoy consumer spending, which fuels 70 percent of growth.
But food and gas prices spiked, and the higher costs forced people to trim discretionary items, such as vacations, appliances and computers.
The 1.3 percent growth rate in the April-June period followed an even weaker 0.4 percent rise in the first quarter of the year.
Economists expect consumer spending, which accounts for about 70 percent of economic activity, to strengthen slightly in the second half of this year.
In the April-June quarter, consumer spending grew at an anemic 0.7 percent rate, though that was better than an estimate a month ago that spending had risen only 0.4 percent.
Trade added more to growth than estimated a month ago because exports grew at a faster pace and imports didn't rise as rapidly. Exports add to US growth, while imports subtract from it.
The annual growth rate was 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago, the Commerce Department said yesterday. The improvement reflected modestly more consumer spending and a bigger boost from trade.
Even with the upward revision, the economy grew at an annual rate of just 0.9 percent in the first six months. That's the weakest six-month performance since the recession ended more than two years ago.
Though most economists don't expect another slump, they don't see growth accelerating enough to lower the jobless rate, which was 9.1 percent in August. Many predict a rebound to growth of 2 percent to 2.5 percent in the current quarter.
A forecasting panel for the National Association for Business Economics predicts total growth for the year will be just 1.7 percent. In January, most economists had predicted 3 to 4 percent growth for the entire year. A Social Security tax cut gave Americans an extra US$1,000 to US$2,000 in after-tax income. That was expected to buoy consumer spending, which fuels 70 percent of growth.
But food and gas prices spiked, and the higher costs forced people to trim discretionary items, such as vacations, appliances and computers.
The 1.3 percent growth rate in the April-June period followed an even weaker 0.4 percent rise in the first quarter of the year.
Economists expect consumer spending, which accounts for about 70 percent of economic activity, to strengthen slightly in the second half of this year.
In the April-June quarter, consumer spending grew at an anemic 0.7 percent rate, though that was better than an estimate a month ago that spending had risen only 0.4 percent.
Trade added more to growth than estimated a month ago because exports grew at a faster pace and imports didn't rise as rapidly. Exports add to US growth, while imports subtract from it.
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