(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.
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