US economy slows, report shows

1 August 2008

The world's largest economy has suffered a further slowdown, new US government figures reveal.

Annual GDP growth now stands at 1.9 per cent, following second quarter 2008 results.

This is down on analysts' previous predictions of 2.4 per cent growth.

There was further bad news for the White House in the report, which revised the fourth quarter of 2007's GDP figure downwards, so that it is now showing negative growth.

This is the first such quarterly result since 2001.

Two consecutive quarters of negative growth in the economy is a common definition of a recession.

US president George W Bush termed the report "positive news".

He added: "It's not as good as we’d like it to be but I want to remind you a few months ago, there were predictions…that the economy would shrink this quarter, not grow."

However, economists were not so upbeat on the report.

"We already knew the economy was weak, and now you have both a negative growth number coupled with job losses," Dean Baker, a director of the Center for Economic and Policy Research told the New York Times.

"There's a lot of real bad times to come."

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