GDP growth beats expectations, still slow

Pedestrians walk past new homes under construction and for sale in Alhambra, east of downtown Los Angeles on July 18, 2012 in Calif.

Jeff Horwich: Four times a year, the U.S. Department of Commerce serves up the big number that tells us how much we are producing as a country. U.S. second quarter GDP grew more than many economists had expected. That does not make it good.

Marketplace's Nancy Marshall-Genzer has more.

Nancy Marshall-Genzer: GDP grew at a rate of 1.5 percent from April to June; that's the weakest growth rate since last summer. Much of the slowdown was caused by reduced consumer demand. Spending on durable goods like cars was down 1 percent.

David Kelly is chief global strategist for JP Morgan Funds.

David Kelly: There's a lot of hesitancy in the economy and people are waiting to see. The problem is there's a lot of confusion from policy makers at both the Federal Reserve and federal government. So there's a certain lethargy to the economy right now; that's really what's keeping it slower than we'd like.

Everybody's waiting to see if Washington can swerve at the last minute to avoid a fiscal cliff of tax hikes and drastic spending cuts at the beginning of next year. Still, there are few bright spots: Exports are up, and spending on construction is still on the rise.

In Washington, I'm Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.


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