U.S. economy grows 1.7% in 2013 second quarter

PanARMENIAN.Net - The U.S. economy grew at an annualized pace of 1.7% in the second quarter of the year, the Commerce Department has said, according to BBC News.

That was a faster pace than expected by economists.

It was also up from the growth rate for the first three months of 2013, which was revised lower to 1.1% from 1.8%.

A slowdown was widely expected due to the impact of federal spending cuts, but also from the continuing weakness in the global economy.

In March, $85bn of public spending was cut as a result of a deal between Democrat and Republican politicians.

But the Commerce Department said that the federal government cut spending by only 1.5% in the April-to-June period, compared with a sharp drop of 8.4% in the first quarter.

Consumer spending accounts for about 70% of US GDP. Official figures showed that consumers spent less in the second quarter than in the first, with personal consumption expenditure up 1.8%, compared with 2.3% previously.

As well as the last set of quarterly figures, the Commerce Department also revised growth figures going back several decades.

It said the US economy now grew by 2.8% in 2012, up from its previous estimate of 2.2%. This may help to explain why growth appeared weak last year but hiring continued to improve.

The government also said that the economy contracted by 4.3% during the recession, which lasted from December 2007 to June 2009, better than the previous estimate of a 4.7% drop.