The US economy came close to flat-lining in the first quarter as consumer spending barely rose
Source: Press TV
The US economy has grown 0.4 percent and 1.3 percent respectively in the first and second quarters of 2011 after the Commerce Department revised its previous estimate of first-quarter GDP growth of 1.9 percent.
The combined growth for the first six months of the year is the weakest since the recession ended, AP reported.
The surprisingly weak GDP growth readings on the world's largest economy coincided with a political deadlock in Washington over raising the country's debt ceiling just days before the Treasury says it could run out of money to pay its obligations.
As Congress has failed to reach an agreement, economists and markets are increasingly concerned that missing the August 2 debt deadline will cause the United States to lose its top triple-A credit rating.
Slowdown in growth is broad-based as business spending on equipment and software grew 5.7 percent in the second quarter, down from the first quarter's 8.7 percent 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.
Complicating an already-weak economy is the debt crisis in Washington. No matter what lawmakers do to resolve that crisis, their decision will likely slow growth in the short term.
Few economists expected growth to be strong enough to lower the unemployment rate and Friday's report, which was below the forecasts, will likely dampen expectations further.