Entries in GDP Growth (5)


US Economy Expanded at Weak 1.5% Pace in Second Quarter

Comstock Images/Thinkstock(WASHINGTON) -- The struggling economy grew at a 1.5 percent pace in the second quarter, the government reported on Friday, confirming a slowdown that has confounded politicians and forced companies to curtail hiring and investment.

The Commerce Department's release of its first advanced estimate of U.S. gross domestic product (GDP) in the second quarter was being closely watched by economists. The turmoil in Europe over the faltering euro and indebted governments has spilled over to the U.S., which is battling unemployment that has been over 8 percent since the recession of 2007-08.

"The GDP numbers for this quarter are somewhat disappointing because, at this point in a normal recovery cycle, we would want the real GDP number at consistently more than 3 percent," said Brian Hamilton, CEO of Sageworks and a leading expert on privately held companies. "The GDP numbers are a little surprising given that our data continues to show strong growth in private company revenue.  It looks as if government sector growth and growth in imports are dragging down GDP. Until GDP is consistently over 3 percent, our fear is that job growth will not be significant."

This is the slowest recovery from a recession since at least 1960. The economy, which must grow at a 4 percent annualized pace or better to bring unemployment down, has been the number one topic in the upcoming presidential election.

Real GDP, the output of goods and services produced in the U.S., for this quarter will have a number of uncertainties, said Scott Brown, chief economist with investment firm Raymond James.

"It's the advanced estimate so the government doesn't have all the pieces of the puzzle," Brown said, such as estimates about foreign trade. "Very often we will see very large revisions later."

Economists expected a consensus 1.2 percent growth in the second quarter, as reported by Bloomberg, compared with 1.9 percent growth in the first quarter.

Copyright 2012 ABC News Radio


Federal Reserve Expects Higher Unemployment than Previously Forecast

iStockphoto/Thinkstock(WASHINGTON) -- The Federal Reserve expects unemployment to be higher at the end of the year than it originally forecast back in April.

The Fed now expects unemployment to be between 8 percent and 8.2 percent by the end of the year; previously, the unemployment rate was forecast to be between 7.8 percent and 8 percent.

GDP growth is expected to be slower, as well.  The Fed now forecasts growth of between 1.9 percent and 2.4 percent by the end of the year; previously, its expected growth between 2.4 percent and 2.9 percent

Troubles in Europe are one of the big reasons the Fed cites for its gloomier forecast.

Copyright 2012 ABC News Radio


US Economy Grew 3% in Fourth Quarter of 2011

Comstock Images/Thinkstock(WASHINGTON) -- The Commerce Department announced on Wednesday that the U.S. economy grew at a slightly faster pace during the last three months of 2011 than had previously been reported.

The agency said the country's gross domestic product (GDP) increased at an annual rate of 3 percent in last year's fourth quarter, up from the previous estimate of 2.8 percent.  The revised figure marks the strongest growth in a year and a half.

The increase was boosted by rising consumer incomes and a higher savings rate.

Copyright 2012 ABC News Radio


Economy to Grow Slow But Steady in 2012, Survey Finds

Comstock Images/Thinkstock(NEW YORK) -- Economists are becoming more confident that the United States will avoid another recession anytime soon, but they’re still cautious about this year’s rate of growth.

The latest quarterly survey from the National Association for Business Economics forecasts 2.4 percent growth this year.

“This is not gangbusters,” economist Richard DeKaser says of the NABE report.  “But it is solid and probably more important is that people are feeling more confident about their forecast.”

The survey says one big difference this year compared to 2011 is an improving jobs market.

“Businesses were able to get away without hiring because productivity was so strong,”  DeKaser said.  “That’s not the case anymore.  So we're seeing even moderate GDP gains translate into more jobs."

Copyright 2012 ABC News Radio


Goldman Sachs: House Spending Cuts Will Hurt Economic Growth

Photo Courtesy - Getty Images(WASHINGTON) -- A confidential new report prepared by Goldman Sachs for its clients says spending cuts passed by the House of Representatives last week would be a drag on the economy, cutting economic growth by about two percent of GDP.

“Under the House-passed spending bill [which cut spending by $61 billion],” says the report, which was obtained by ABC News, “the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.”

The report, which is signed by Goldman economist Alec Phillips, goes on to predict that the House-passed bill is unlikely to become law because it won’t pass the Senate and, in any case, the president threatened to veto it.

More likely, the report says, is a deal to cut spending by $25 billion this year, followed by a cut of $50 billion next year. Even those more modest spending cuts, Goldman Sachs predicts, will cut economic growth rates by one percent of GDP.

Copyright 2011 ABC News Radio 

ABC News Radio