WASHINGTON -- The U.S. economy grew at a weak rate of 1.3 percent from April through June, another sign that the recovery has faltered dramatically.
The Commerce Department also scaled back its estimate of economic growth in the first quarter of the year to just 0.4 percent, the lowest figure since the severe recession technically ended in mid-2009.
Friday's second-quarter figures fell short of expectations and are well below the level of growth needed to bring down the nation's high unemployment rate. Economists had projected that the economy grew at a 1.8 percent annualized rate in the second quarter.
Kathy Bostjancic, director for macroeconomic analysis at the Conference Board, said the disappointing new data -- combined with the ongoing political stalemate over raising the debt ceiling -- could push the U.S. economy back into recession. Although she noted the chances of that are still low.
"Anemic consumption, still declining state and local government spending, tepid business investment, and soft housing activity all combined to offset some strength in exports," she said. "Concerns about the weak labor market and rising food and energy prices continue to weigh on consumer confidence."
The figures for the nation's gross domestic product in the second quarter came on the heals of a sharp slowdown in the recovery in the first thee months of the year. After the economy grew at an annualized rate of 3.1 percent in the fourth quarter of 2010, the rate slowed dramatically to just 1.9 percent growth from January to March of this year.
Economists had hoped that the slow first-quarter growth was caused by temporary factors, such as rough winter weather in much of the country and a spike in oil prices caused by unrest in the Middle East. But the slowdown continued through the second quarter, with the unemployment rate rising from 8.8 percent in March to 9.2 percent in June.
Last month, the Federal Reserve downgraded its earlier estimate of economic growth for the year. The Fed now believes the economy will grow between 2.7 percent and 2.9 percent, down from an April estimate of 3.1 percent to 3.3 percent.
Friday's economic data followed better than expected jobless numbers on Thursday. New claims for unemployment fell to 398,000, the first time since April the weekly figure dropped below 400,000.
(c) 2011, Los Angeles Times.
Visit the Los Angeles Times, www.latimes.com/.
Distributed by McClatchy-Tribune Information Services.