New figures confirm the weakness in the U.S. economy, as the gross domestic product expanded in the second quarter at its slowest pace in eight years. The pace of growth in the output of goods and services has slowed to just 0.2 percent.
While the pace of growth was slow it was better than many analysts had expected. The consensus forecast was that economic growth would be, at best, zero and could be negative in the April to June quarter.
Commerce Secretary Donald Evans said he was disappointed in the GDP report, but is confident that growth will rebound sharply in the months ahead.
Senior economist Marty Mauro, of the investment firm Merrill Lynch in New York, says the figures were in line with expectations, but slightly better than he had predicted.
Mr. Mauro believes the second quarter will be seen as the weakest point in the business cycle. He says that, boosted by tax cuts and lower interest rates, economic activity will gradually and steadily improve over the next 12-months. "I think things will be getting better, but I think it is going to happen irregularly," he says. "The income tax rebates - I think a good proportion of that will be spent, so that will give a little lift to measures of economic activity, but I do not think it is going to be a straight line or a smooth line. We will see some ups and downs along the way. Next year, I think growth will be stronger than it has been over the past four quarters."
Some weeks earlier, the commerce department had reported second quarter GDP growth at 0.7 percent. But initial reports are revised twice as more data becomes available.
The economy grew at a 1.3 percent annual rate in the first quarter. In 2000, growth exceeded four percent. Despite recent weakness, the U.S. economy is still in the midst of its longest period of expansion ever. The expansion that began in 1992 is nearly 10 years old.