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US Economic Growth Slowed in 2nd Quarter

The Commerce Department Wednesday said U.S. economic growth slowed in the April to June period.

The pace of growth slowed to an annual rate of only 1.1 percent in the second quarter. That is only half the 2.2 percent pace expected by Wall Street economists.

The slowdown follows a revised five percent economic growth rate in the first three months of the year. The figures confirm that the economy is not recovering from last year's recession as quickly as most experts had anticipated.

Following a short and mild downturn last year, the Bush administration has been predicting solid three percent growth by the end of the year.

Stock prices, regarded as an indicator of economic activity, have been declining for several months. And consumer confidence, as measured by a private research group, fell sharply during July. The Conference Board report said consumers are worried by the wave of corporate scandals, the stock market drop, and the slow increase in available jobs.

Consumer spending, which was strong in the first quarter, slowed sharply during the second quarter.

Separately, the Commerce Department revised downwards growth figures from 2001. It now says there were three consecutive quarters of negative growth prior to the significant rebound in the fourth quarter.

For 2001 the U.S. economy grew by an anemic 0.3 percent, instead of the previously reported 1.2 percent rate.