Sept. 28, 2012 – The government’s final revision to second-quarter growth in gross domestic product was disappointing and, on close analysis, points to new underlying weaknesses in the economy, NAFCU Chief Economist David Carrier said Thursday.
The Bureau of Economic Analysis reported Thursday that its third and final look at 2Q GDP showed economic growth slowed to 1.3 percent. That is revised downward from a previous estimate of 1.7 percent.
Among the underlying weaknesses, the most significant was a sharp slowdown in fixed investment and consumer spending, both of which had been growing steadily in the previous four quarters.
Carrier said it appears growth will remain lackluster for some time.
“The current pace of economic growth is not enough to bring down the unemployment rate, and that continues to be the greatest drag on economic growth going forward,” said Carrier. “This is already the weakest recovery since the Great Depression, and it’s looking like growth may continue to be sluggish for some time to come.”
For more on the 2Q GDP analysis, see NAFCU’s Macro Data Flash (members only).