Weak economic growth in 2Q beats estimates

The economy grew slightly faster in the spring than previously estimated but remained dangerously weak in the face of high unemployment and higher gas prices. The annual growth rate was 1.3% in the April-June quarter, up from an estimate of 1% made a month ago, the Commerce Department reports today. The improvement reflected modestly increased consumer spending and a bigger boost from trade. Many economists foresee slightly better growth in the current July-September quarter. Even with the upward revision, the economy grew at an annual rate of just 0.9% in the first six months of the year. That’s the weakest six-month performance since the recession ended more than two years ago. Though most economists don’t expect another recession, they don’t see growth accelerating enough to lower the unemployment rate, which was 9.1% in August. Many predict a rebound to growth of between 2% and 2.5% in the current quarter. In a separate report released today, the government says the number of people seeking unemployment benefits fell sharply last week, an encouraging sign that layoffs are easing. The Labor Department says weekly applications dropped 37,000 to a seasonally adjusted 391,000. That’s the lowest level since April 2, and it’s the first time that applications have fallen below 400,000 since Aug. 6. Read more about the Commerce Department report from The Associated Press here.