Sunday, August 19

Growth rate of the U.S. economy slowed in the second quarter

By NBC News staff and wire reports
The US economy grew up to the slowest pace in nearly a year between April and June as consumers and businesses concerned about jobs, wages, Washington and Europe died from a raft.

The Commerce Department reported that gross domestic product expanded pace from January in the second quarter, after rising to a 2.0 percent revised upwards to March at an annual rate of 1.5 percent. Output for the fourth quarter increased by 3.0 per cent to 4.1 per cent.

The growth rate in the second quarter, the expectations of economists was, was the slowest since the third quarter of 2011. It solves a major hurdle for President Barack Obama like him for reelection in November against the Republican challenger Mitt Romney battles. With only a few months until the election left voters already form strong opinions about the economy, may be hard to shake that before they get in the voting booth.

"The economy fights to keep level", said Robert dye, Chief Economist at Comerica in Dallas.

Consumers spent at the lowest speed in a year when they again reduced, purchase helped car, economic growth in the previous two quarters.

Shoppers are spending in an economy, which is not yet fully by the financial crisis and the recession late 2007 to mid-2009 with the nation, unemployment rate of 8.2% has recovered. This reluctance reflected in each of the last three months in the retail sales, closed. Also wages stagnate since years undermines the willingness of consumers to spend.

The economy needs a growth rate of at least 2.0 to 2.5, which prices stable, let % only to employment than whittling down to keep it.

The weak growth report, characterised by weak data of employment to manufacturing, can expectations in a third round of bond purchases, known as quantitative easing by the Fed raise.

The Fed has injected already $2.30 trillion into the economy through asset purchases and overnight interest rates close to zero, leaving some economists worry to make that the Fed left not enough applications, has his Kit.

No major political announcement is expected at the Fed next week, but many economists now say two-day meeting could move the Central Bank if policy makers on September 12-13.

Last month the Fed extended a program to the bonds re-weight, which already holds it in the direction of the longer dated borrowing costs.

The economy was by ensure deep Government spending cuts and tax increases, the expected early 2013 kick in hit, as well as problems of the debt crisis in Europe.

The biggest factor that is at rest with a weight of fear that politicians in Washington not in the position, is to avoid the so-called tax cliffs at the turn of the year, said economists.

Current economic data suggest to limited area for growth in the third quarter again on its feet.

Wall Street and Washington Watch consumer spending closely because it accounts for more than two-thirds of the U.S. economy. Structures.

Reuters contributed to this report.

CNBC Rick Santelli breaks the latest economic data on the gross domestic product of the country, with Joel Naroff, President of Naroff Economic Advisors.

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