The US economy grew at a much slower pace this spring than previously estimated, mostly due to the largest surge in imports in 26 years and a slower buildup in inventories.
The country’s GDP grew at an annualized rate of 1.6 percent in the April-to-June period, the US Commerce Department said yesterday. That is down from an initial estimate of 2.4 percent last month and much slower than the 3.7 percent recorded in the first quarter. Many economists had expected a sharper drop.
The widening trade deficit subtracted nearly 3.4 percentage points from second quarter growth, the largest hit from a trade imbalance since 1947, the government said.
The report confirms the economy has lost significant momentum in recent months. Most analysts expect US GDP to continue growing at a similarly weak pace in the current quarter and for the rest of this year.
The economy has grown for four straight quarters, but that growth has averaged only 2.9 percent, considered unexceptional after such a steep recession. The economy needs to expand at about 3 percent just to keep the unemployment rate, currently 9.5 percent, from rising.
Business investment in new machinery, computers and software drove much of the growth last quarter, increasing nearly 25 percent.
Consumers spent a bit more in the second quarter than previously estimated. Their spending rose at a 2 percent annual rate, slightly higher than the first quarter’s 1.9 percent.
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