Sunday, July 29, 2012

US economic growth slows in second quarter

Growth in the US economy slowed in the second quarter to an annualised pace of 1.5%, as consumer spending eased.

But growth in the first three months of the year was revised up to 2% from a previous estimate of 1.9%, the Commerce Department said.

Previous data was also revised to show the economy shrank by less during the 2007-9 recession than thought.

Despite the slowdown, the second quarter growth figures were better than expected and US stocks rallied sharply.

The main Dow Jones index closed up 188 points, or 1.5%, at 13,076, its highest level since early May.

A joint statement from French President Francois Hollande and German Chancellor Angela Merkel reasserting their commitment to preserving the euro also helped to push Wall Street higher.

The Commerce Department's latest figures showed the US economy shrank by 4.7% from the start of the recession in 2007 until it ended in 2009.

It had earlier been thought the economy contracted by 5.1% over that period. Read More