US economy grows more than expected in Q2
Despite expanding at its slowest pace in a year as weakening employment numbers dampened consumer spending, the growth rate was nonetheless just ahead of forecasts which had it at 1.4%.
The first official reading of Q2’s GDP figure comes after the world’s largest economy expanded by 2% in Q1, and by 3% in the fourth quarter of last year.
A pullback in growth had been expected, with analysts blaming households cutting back on their spending as a crucial dampener on growth.
Meanwhile the impact from the deteriorating eurozone, and the threat posed by the approaching US fiscal cliff, continue to hurt corporate investment.
Weak growth will make it harder for the US government to tackle unemployment, although Federal Reserve chairman Ben Bernanke recently encouraged investors by hinting at the possibility of further quantitative easing.
But Capital Economics said the 1.5% rise, coupled with upwards revisions to previous years’ data, lent support to its view that the Fed is unlikely to launch QE3 next week.
GDP growth for Q4 2011 was increased from 3% to 4.1%, bumping up growth for 2011 as a whole from 1.7% to 1.8%.
The 3.5% fall in GDP growth reported in 2009 was revised down to a fall of 3.1%, but 2010 growth was cut back sharply from 3% to 2.4%.