U.S. GDP grows less than expected

U.S. gross domestic product (GDP) rose at an annual rate of 1.3 percent in the second quarter of 2011, which was less than expected, according to the Bureau of Economic Analysis. First-quarter GDP also was revised to 0.4 percent from earlier estimates of 1.9 percent. The revised figure indicates the economy isn’t recovering as much as previously thought.

U.S. Commerce Secretary Gary Locke said in a statement:

Today’s first look at GDP in the second quarter confirms what we already knew: The economy isn’t growing as fast as it needs to. And every day that we fail to act to lift the debt ceiling and inch closer to default, we threaten our economic progress and job creation. Experts have repeatedly warned that if this uncertainty continues, our economy will pay the price. We can’t afford to return to the same failed policies that brought us here. We must build on the progress we’ve made over the last two years and reach a balanced compromise that will reduce our debt and at the same time strengthen our job-creating ability and global competitiveness for the future.

Also, as consumers remain cautious about spending in this economy, the personal savings rate has risen. The personal savings rate was 5.1 percent in the second quarter, up from 4.9 percent in the first period.

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