News / Economy

US 2nd Quarter GDP - Lackluster, But Better Than Expected

US Second Quarter GDP - Lackluster, But Better Than Expectedi
X
August 01, 2013 10:40 PM
The world’s largest economy grew only slightly in the second quarter, expanding at an annualized rate of 1.7 percent between April and June. Despite the lackluster growth and a downward revision in U.S. gross domestic output in the first quarter, the GDP numbers were still better than some analysts expected. But the data also suggest the economy is still not growing fast enough for the central bank to change course on monetary policies that have kept interest rates at record lows. VOA's Mil Arcega has more.
The world’s largest economy grew only slightly in the second quarter, expanding at an annualized rate of 1.7 percent between April and June.  Despite the lackluster growth and a downward revision in U.S. gross domestic output in the first quarter, the GDP numbers were still better than some analysts expected.  But the data also suggest the economy is still not growing fast enough for the central bank to change course on monetary policies that have kept interest rates at record lows.
 
GDP - the broadest measure of the U.S. economy - confirms continuing slow but steady growth - led by better than expected consumer spending and a much improved housing market.  Economists say it shows an economy barely in recovery - but one resilient enough to absorb deep government spending cuts enacted by Congress earlier this year.

Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics in Washington, D.C., says the numbers took him by surprise.
 
"I’m really amazed at how well we’re doing given the sequester (government spending cuts) and the big tax increases we had this year.  Although I was predicting a year ago that if we could have avoided the sequester and the tax increases this year, we could have kicked that can down the road another year or two (postponed the spending cuts and tax increases) - that we might be growing over three percent, almost four percent this year," says Gagnon. 
 
The U.S. central bank has said as much, warning Congress that a continuing focus on government austerity could further slow the recovery.

Anthony Valeri, at LPL Financial, says weak growth in the first half of 2013 means the Federal Reserve, as the U.S. central bank is referred to, is unlikely to scale back too quickly on its easy money policies.
 
“I think [Federal Reserve Chairman Ben] Bernanke and company made it pretty clear that they are still very dovish (in favor of low interest rates). They are in no rush to remove accommodation (quantitative easing policy) and that they are in no rush, more importantly, to raise interest rates,” says Valeri.
 
The Federal Reserve has been purchasing $85 billion a month in bonds and mortgage-backed securities to keep long-term interest rates at record lows. Experts say ending the program too soon could stall the housing recovery. 

Economist Ken Simonson says that would hurt employment.
 
“Clearly, over time, more people would find they don’t qualify for a mortgage if rates do keep rising, so that could put a lid on (bring to a halt) how high home sales and home construction go.”
 
Economists expect more clarity on the U.S. economic picture when the monthly jobs report comes out August 2. Recent economic surveys suggest companies are still hiring, and that unemployment likely fell last month from 7.6 to 7.5 percent.

You May Like

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
South Africa Sees Male Circumcision as Way to Reduce HIV Infectionsi
X
November 28, 2014 3:31 PM
South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video South Africa Sees Male Circumcision as Way to Reduce HIV Infections

South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8010
JPY
USD
118.31
GBP
USD
0.6371
CAD
USD
1.1397
INR
USD
62.122

Rates may not be current.