by Wadsam | August 30, 2012 3:15 am
The U.S. economy grew more than previously estimated in the second quarter, according to a report released on Wednesday by the Federal Reserve.
Growth domestic product grew by 1.7% from April to June, more than the government’s previous estimate of 1.5%, and is a slowdown from 2% in the first three months of the year.
The report was the government’s second look at gross domestic product for the second quarter. A third and final estimate of second-quarter growth will be released next month.
The unemployment rate is currently at 8.3%.
A growth pace between 2% and 2.5% is needed to just keep the jobless rate steady and this sluggish growth is proving to be one of the biggest issues facing President Obama, ahead of this year’s elections.
Paul Dales, senior U.S. economist at Capital Economics said the small revision to second-quarter growth “offers little comfort,” adding “We are already two months through the third quarter and more up-to-date figures show that the economy is still struggling.”
Slow growth could prompt the Federal Reserve to take greater steps to boost the economy when policymakers meet again on Sept. 12-13.
Federal Reserve chairman, Ben Bernanke, will be giving a speech at the central bank’s annual gathering in Jackson Hall, Wyoming on Friday, where it is expected that he will offer more clarity on the outlook for monetary policy.
“Growth is neither strong enough for Bernanke to take any additional easing off the table, but it is hardly weak enough to force him to announce new actions,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Some suspect the Fed will wait to see how the economy performed in August, especially after July’s data was better than expected.
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