The U.S. economy slowed significantly from Q1′s 3.7% pace.
From the BEA:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.4 percent in the second quarter of 2010, (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.
The New York Times adds:
This slowdown, coupled with disappointing job creation, has led to worries that the recovery is losing steam. The nation’s unemployment rate continues to linger just below 10 percent. Some forecasters have predicted even slower growth in the second half of the year, perhaps close to an annual rate of 1.5 percent. Some of that drag will be due to the withdrawal of stimulus-related policy measures, and some to the fact that many businesses have already refilled the stockroom shelves that they whittled down during the crisis.
At that pace of total G.D.P. growth, it may be years before the economy returns to the trend it was on before the financial crisis hit.
“Given how weak the labor market is, how long we’ve been without real growth, the rest of this year is probably still going to feel like a recession,” said Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics. “It’s still positive growth — rather than contraction — but it’s going to be very, very protracted.”
Calculated Risk adds:
A few key numbers:
“Real personal consumption expenditures increased 1.6 percent in the second quarter, compared with an increase of 1.9 percent in the first.”PCE is slowing. Investment: Nonresidential structures increased 5.2 percent, in contrast to a decrease of 17.8 percent. Equipment and software increased 21.9 percent, compared with an increase of 20.4 percent. Real residential fixed investment increased 27.9 percent, in contrast to a decrease of 12.3 percent.Residential investment was boosted by the tax credit and will decline in Q3. “The change in real private inventories added 1.05 percentage points to the second-quarter changein real GDP after adding 2.64 percentage points to the first-quarter change.”That is probably the end of the inventory adjustment.
Here is a graph from The Atlantic:
