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Economic Growth Weaker Than Expected
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Jul 30, 2004 02:38pm |
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| Category | News |
| Media | Newspaper - Washington Post |
| News Date | Friday, July 30, 2004 06:00:00 AM UTC0:0 |
| Description | By Nell Henderson
Washington Post Staff Writer
Friday, July 30, 2004; 2:02 PM
U.S. economic growth slowed sharply in the spring to its weakest pace in more than a year as higher energy prices sapped consumers' buying power, the government reported today.
The nation's output of goods and services, or gross domestic product, rose at a 3 percent annual rate, adjusted for inflation, in the April through June period, down from the much stronger 4.5 percent rate of the first three months of the year, the Commerce Department said.
The drop primarily reflected skidding consumer spending, which rose at a meager 1 percent annual rate in the second quarter, the slowest rate since the 1 percent gain recorded in the spring of 2001 -- the beginning of the last recession.
Consumer spending had jumped at a 4.1 percent annual pace in the first quarter, boosted in part by federal tax cuts and very low interest rates. But by spring, the effects of the tax cut were fading and both interest rates and gasoline prices were rising, with gas hitting an all-time high national average of $2.054 for a gallon of unleaded regular on May 26.
Analysts were divided about whether the figures reflect a brief hiccup in the expansion or the beginning of a more serious slump. |
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