As the debt talks stagnate in D.C., the Commerce Department has just released a gloomy report noting that the nation's gross domestic product rose by a rate of only 1.3 percent in the second quarter and revised the growth figure for the first quarter sharply down. The figures show the U.S. economy slowed to its "weakest pace since the recession ended," says the Associated Press and Reuters calls the rate "tepid." Economists surveyed by the Dow Jones Newswires "expected GDP to rise 1.8% in the second quarter." From The Wall Street Journal:
The Commerce Department Friday said gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while outlays by the federal government and consumers were also revised down.
Higher gas prices and reduced consumer spending were cited as culprits for the slower pace of growth.