The U.S. economy continued to grow during the second quarter, but the pace slowed even more than economists were expecting, according to a government report Friday.
Gross domestic product, the broadest measure of the nation’s economic activity, rose at a 2.4% annual rate during the three months ended June 30, the Commerce Department said.
The sluggish pace is down from the upwardly revised 3.7% growth rate in the first quarter, and missed economists’ forecast for a 2.5% increase.
Still, the figure marked the fourth straight quarter of growth and confirmed economists’ views that the recession that began in December 2007 ended at some point in the middle of 2009.
The softer expansion came as consumer spending scaled back and imports surged, widening the trade gap, the government said.
“The big surprise to me was in how weak consumer spending turned out to be,” said Nigel Gault, chief U.S. economist at IHS Global Insight.
The report showed consumer spending rose at a modest 1.6% rate last quarter. That compares to a 1.9% rise during the first quarter, revised down from a previously reported 3%.
Gault said the subdued consumer spending, pressured by high unemployment and debt as well as a lack of income and credit access, could lead to even slower growth in the current quarter.
“People are continuing to cut back, and that could mean that third quarter growth will be the worst since the end of the recession,” he said. “The slowing growth path leaves the possibility of a double-dip recession on the table.”
A surge in imports also weighed on domestic growth, the government said. Imports spiked 28.8% during the second quarter, up from an 11.2% hike in the previous quarter.
By Hibah Yousuf – cnn.com
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