U.S. economy grew at annualised 2.4% in June quarter

San Diego News Site.Net
Friday 30th July, 2010

First quarter growth was revised upwards to an annualised 3.7% growth rate.

Gross Domestic Product, the ultimate measurement of the strength of the economy, grew at a slower pace in the second quarter, U.S. officials reported Friday.

In Washington DC, the Commerce Department said economic growth in the second quarter slowed to an annualised rate of 2.4%. Analysts had expected a figure in the order of 2.6%.

On a positive note, the GDP in the first quarter was revised upwards to an annualised rate of 3.7%.

A widening of the trade deficit due to slowing exports and an increase in imports contributed to the slowing economy. A stronger U.S. dollar over much of the quarter played a part in the trade gap, although the dollar in recent days has been clawing back losses.

A minor sell-off of the dollar followed the release of the GDP data.

“The economy entered the second quarter with plenty of momentum but exited with very little,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, told Bloomberg prior to the report being released. “We expect that growth in the third quarter will be slower.”

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