U.S. Economy Slows Dramatically in Spring
17 minutes ago
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - The U.S. economy grew at an annual rate of just 3 percent in the spring, a dramatic slowdown from the rapid pace of the past year, as consumer spending fell to the weakest rate since the last recession, the government reported Friday.
The Commerce Department (news - web sites) said that the gross domestic product, the country's total output of goods and services, slowed sharply in the April-June quarter from a 4.5 percent growth rate in the first three months of the year.
The size of the slowdown caught economists by surprise. Many had been looking for GDP (news - web sites) growth to come in around 3.8 percent in the second quarter. Even that would have been a sharp deceleration for an economy that had been growing at a 5.4 percent annual rate through the year ending in March.
It raised the issue of whether the economy, which Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said last week had encountered a "soft patch" in June, could be in danger of seeing growth falter even more in coming quarters.
In one piece of good news, inflation pressures eased with a key GDP inflation gauge that excludes energy and food rising at an annual rate of just 1.8 percent in the second quarter, down from a 2.1 percent increase in the first quarter.
http://story.news.yahoo.com/news?tmpl=story&ncid=&e=6&u=/ap/20040730/ap_on_bi_go_ec_fi/economy
u.s. economy slows dramatically in spring !
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