The economy expanded at meager rate of 1.3 percent annual rate in the spring after scarcely growing at all in the first three months of the year, The Associated Press reports, citing date release Friday by the Commerce Department.
The combined growth for the first six months of the year was the weakest since the recession ended. The government revised the January-March figures to show just 0.4 percent growth — down sharply from its previous estimate of 1.9 percent.
High gas prices and scant income gains have forced consumers to pull back sharply on spending in the spring.
The sharp slowdown means the economy will likely grow this year at a weaker pace than last year. Economists don’t expect growth to pick up enough in the second half of the year to lower the unemployment rate, which rose to 9.2 percent last month.
Earlier this year, economists thought that a Social Security payroll tax cut would accelerate growth in 2011. But most of that money has gone to pay for higher gas prices. And employers have pulled back on hiring after seeing less spending by Americans.
Consumer spending was almost flat this spring. It increased only 0.1 percent, after 2.1 percent growth in the winter. Spending on long-lasting manufactured goods, such as autos and appliances, fell 4.4 percent. Many auto dealers reported shortages of popular models after Japan’s March 11 earthquake, cutting into auto sales.
Business spending on equipment and software grew 5.7 percent in the second quarter, down from the first quarter’s 8.7 percent pace and below the double-digit gains posted last year.
Americans are seeing little gain in their incomes. After-tax incomes, adjusted for inflation, rose only 0.7 percent, matching the previous quarter and the weakest since the recession ended.
