The U.S. economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending.
Gross domestic product, the value of all goods and services produced, rose at a 1.5 percent annual rate after a revised 2 percent gain in the prior quarter, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.4 percent increase. Household purchases, which account for about 70 percent of the worldâ€™s largest economy, grew at the slowest pace in a year.
Consumers are cutting back just as Europeâ€™s debt crisis and looming U.S. tax-policy changes dent confidence, hurting sales at companies from United Parcel Service Inc. (UPS) to Procter & Gamble Co. (PG) Cooling growth makes it harder to reduce unemployment, helping explain why Federal Reserve Chairman Ben S. Bernanke has said policy makers stand ready with more stimulus if needed.
â€œWe have an anemic recovery with really no momentum,â€ said Julia Coronado, chief economist for North America at BNP Paribas in New York. â€œItâ€™s reflective of uncertainty in the global outlook. Itâ€™s a frustrating picture for policy makers. The report is supportive of further easing.â€
Stock-index futures held earlier gains after the report. The contract on the Standard & Poorâ€™s 500 Index maturing in September rose 0.4 percent to 1,360.3 at 8:55 a.m. in New York.