US economy grows 0.2%
Growth in the American economy slowed in the second quarter to an annual rate of just 0.2%, the lowest growth for eight years. Even that was good enough to beat some analysts expectations of zero or negative growth, however, leading to qualified optimism in some quarters for improved growth later in the year.
It appears that robust consumer spending has served to shore up the US economy. Other indicators such as capital spending and profits continued to decline, confirming that the economy is still unhealthy and by no means out of the woods. Slowing growth in Asia and Europe also hit exports, which were down more than expected. Stock markets fell after an initial rally.
Economists believe that if consumer spending holds up and people splash out with some of the $40 billion in tax rebates that the US government is handing out over the next few weeks, it is just possible that Americans could spend their way to improved growth in the third quarter.
