U.S. economy grew 1.3 percent during the second quarter

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The U.S. economy grew at a slower pace than economists forecast during the second quarter, causing economists to lower their growth forecasts for the rest of the year, according to The Washington Post.

Gross domestic product increased at a 1.3 percent annual rate from April through June compared with a revised rate of 0.4 percent (previously reported as 1.9 percent) during the first three months of 2011.

"This is not a death sentence for the recovery, but it does raise some concerns," says Carl Riccadonna, an economist at Deutsche Bank, New York.

Consumer spending increased only 0.1 percent during the second quarter—the smallest gain in two years—as a result of high gas prices and minimal income gains. Consumer spending on long-lasting manufactured goods, such as automobiles and appliances, fell 4.4 percent.

Government purchases fell for the third consecutive quarter, driven by cuts at the state and local level.

8/3/2011

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