By Michael A. Fletcher for The Washington Post
Original Headline: GDP: U.S. economic growth slowed to 1.5% in last 3 months
The economy grew at an annual rate of 1.5 percent from April through June, the Commerce Department reported Friday, a pace that confirmed fears that the economy continues to sputter.
A growth rate below 2 percent isn’t enough to lower the unemployment rate, which was 8.2 percent last month. And few analysts expect the economy to gain momentum in the second half of the year, as concern about debt problems in Europe and the fiscal cliff — a series of tax increases and spending cuts due to take effect in January unless policy makers find an alternative — dampen confidence.
The GDP report said growth in consumer spending — which accounts for about 70 percent of economic activity — slowed to an annualized rate of 1.5 percent in the second quarter, down from 2.4 percent in the first three months of the year. Automobile sales slowed from the first quarter, and spending on durable goods was down 1 percent, after being up sharply in the first three months of the year. The savings rate, which was pegged at 3.6 percent for the first quarter, bumped up to a 4 percent rate between April and June.
The Commerce Department also said that the economy in the first three months of 2012 grew slightly more than previously reported, raising its estimate to a 2 percent rate, from 1.9 percent.
Economists speculated that the continued weak GDP growth — which has averaged 2.2 percent since the recovery began three years ago — would spur the Federal Reserve to take further action to lower long-term interest rates in hopes of stimulating the economy.
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