US economy slows to 1.5% growth

The preliminary growth estimates are lower than the 2% economic expansion.

Written by Agencies | Washington | Published: July 27, 2012 10:41:26 pm

Indicating slowing activities,the US economy grew just 1.5 per cent in the three months ended June as consumers cut back on their spending. The preliminary growth estimates,released today,is lower than the 2 per cent economic expansion registered in the 2012 March quarter.

The slowdown in the world’s largest economy comes at a time when the persisting European debt turmoil is impacting global economic activities.

“Real gross domestic product — the output of goods and services produced by labour and property located in the United States — increased at an annual rate of 1.5 per cent in the second quarter of 2012,” the US Bureau of Economic Analysis (BEA) said.

The latest projection based on source data that are incomplete or subject to further revision,it noted. Lower consumer spending was the main drag on the economy in the latest June quarter.

“Real personal consumption expenditures increased 1.5 per cent in the second quarter,compared with an increase of 2.4 per cent in the first. Durable goods decreased 1 per cent,in contrast to an increase of 11.5 per cent,” BEA noted. At current-dollar GDP,the US economy was valued at USD 15.595 trillion.

The US Federal Reserve in June had slashed the growth forecast for this year to 2.4 per cent from earlier estimate of 2.9 per cent.

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