WASHINGTON, (Pakistan Point News - APP - 29th july, 2016) - The US economy grew more slowly than expected in the second quarter of 2016, rising a modest 1.2 percent, according to an advance estimate released Friday by the Commerce Department. The department also revised first-quarter growth estimates for gross domestic product downward to 0.8 percent from 1.1 percent, reflecting results in residential investment, private inventories and exports that were poorer than previously reported.
The second quarter results were well below analysts' expectations of 2.6 percent growth and could temper the cautious optimism expressed at this week's meeting of the US Federal Reserve. The Fed had left rates untouched but acknowledged a somewhat rosier economic picture, leaving open the possibility of rate increases in 2016 should conditions continue to improve. The results come in the middle of a hotly contested presidential election in which voters' economic prospects are a key issue.
"Today's report underscores that there is more work to do and the president will continue to take steps to strengthen economic growth and boost living standards," Jason Furman, chairman of the Council of Economic Advisers, said in a statement issued by the White House. The statement noted a strong rise in consumer spending at 4.2 percent. The small rise in second-quarter growth reflected increases in consumer prices and exports and smaller drops in federal spending and non-residential fixed investment, according to the commerce department. These gains were offset, however, by smaller spending from state and local governments as well as from companies.