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Economic growth slows abruptly; inflation picks up
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| Contributor | RP |
| Last Edited | RP Jul 28, 2006 05:15pm |
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| Category | Report |
| Media | Newspaper - USA Today |
| News Date | Friday, July 28, 2006 04:35:00 PM UTC0:0 |
| Description | Economic growth slowed abruptly during the second quarter to less than half the pace seen at the beginning of the year, while a key gauge of inflation accelerated, the Commerce Department said Friday.
Gross domestic product grew at a 2.5% annual rate in the April-June quarter, well below Wall Street analysts' forecasts for 3% and less than half the robust 5.6% rate registered in the first quarter. Slower consumer spending, especially on costly durable goods like new cars, was a key reason for slower expansion.
At the same time, an inflation gauge favored by the Federal Reserve — a measure of personal consumption expenditure prices minus food and energy — rose at a 2.9% rate in the second quarter, well ahead of the first quarter's 2.1%. Department officials said it was the fastest rate of increase for the gauge in nearly a dozen years, since the third quarter of 1994 when it jumped at a 3.2% rate. |
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