Growth in the U.S. economy was sluggish again in the spring, dashing expectations for a robust rebound after a tough winter.
The Associated Press reports that stronger consumer spending was offset by weakness in housing construction and a big slowdown in the pace that businesses restocked store shelves.
The Commerce Department says today the gross domestic product—the broadest measure of the economy—grew at a 1.2% annual rate in the April-June quarter. That was far below the 2.6% GDP growth rate that economists had been forecasting.
The government also revised down its estimate of first-quarter growth to 0.8% from 1.1%. The economy has now grown at lackluster rates for three straight quarters.
Despite the worse-than-expected performance in the second quarter, analysts say they remained hopeful that the economy will rebound in the second half of this year as some of the headwinds start to abate. Analysts also say that businesses will likely ramp up inventories in the coming months.
Meanwhile, consumer spending, which accounts for 70% of economic activity, did accelerate in the spring, growing at an annual rate of 4.2%. That was more than double the 1.6% rate in the first quarter. It was the strongest surge for consumer spending since the final three months of 2014.
