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US Economic Growth Falters

  • Jim Randle

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 28, 2016.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 28, 2016.

The U.S. economy expanded at a disappointing 1.2 percent annual rate in April, May, and June, as weak business investment outweighed strong consumer spending.

Friday's Commerce Department report also said the previous quarter's growth was slower than first thought.

Analysts say weak business investment may reflect worries about the global economy. Manufacturers have been hurt by the strong U.S. dollar that makes U.S. products more expensive on global markets. The energy industry has also been hard hit by continued low oil prices. Friday saw Exxon report its weakest quarterly profit in 17 years.

Economists were expecting a stronger GDP report, and some of them say the slow growth may prompt the U.S. central bank to delay a decision to raise interest rates that have been held at unusually low levels for many years.

White House economic advisor Jason Furman calls the strong consumer spending encouraging, and says the business spending data tends to be "volatile" and could change by next month.

Some other analysts say U.S. economic growth will probably be two percent or less for this year.

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