The economy expanded at an annual rate of 1.3 percent in the April-June quarter, up from an estimate of 1 percent a month ago, the Commerce Department said. The improvement reflected modestly higher consumer spending and a bigger boost from trade.
Even so, the economy grew at an annual rate of just 0.9 percent in the first six months of the year. That’s the weakest six-month performance since the recession ended more than two years ago.
Many Americans are spending less because they’re paying off debt. That trend is likely to hold back the economy in the months ahead.
Weak consumer spending, high unemployment and financial market turmoil could slow growth for the rest of this year.
Most economists don’t expect another recession. But they also don’t see growth accelerating much. Many foresee a rebound to between 2 percent and 2.5 percent growth in the current quarter.
“Growth remains sluggish and insufficient to reduce the unemployment rate,” Ryan Sweet, an economist at Moody’s Analytics, said in a note to clients.
The unemployment rate was stuck at 9.1 percent in August for the second straight month. Employers didn’t add any jobs in August – the weakest showing in nearly a year.
Economists expect little if any improvement in hiring for September. Sweet thinks employers will have added 50,000 jobs this month. More than twice as many jobs would be needed just to keep up with population growth.
In another report, applications for unemployment benefits last week dropped 37,000 to a seasonally adjusted 391,000. That was the fewest since April 2.
Some of the improvement was due to technical factors related to the seasonal adjustment of the data, a Labor Department spokesman said.