US economy grows a modest 1.2pc
THE US economy grew more slowly than expected in the second quarter of 2016, rising a modest 1.2 percent.
The Commerce Department also revised first-quarter growth estimates for gross domestic product downward to 0.8pc from 1.1pc, reflecting results in residential investment, private inventories and exports that were poorer than previously reported.
The second-quarter results were well below analysts’ expectations of 2.6pc growth and could temper the cautious optimism expressed by the US Federal Reserve.
The Fed had left rates untouched but acknowledged a somewhat rosier economic picture, leaving open the possibility of rate increases later in 2016 should conditions improve.
The results come in the middle of a hotly contested presidential election in which voters’ economic prospects are a key issue.
Disposable personal income rose 3.1pc to US$106.3 billion, faster than the first quarter’s estimate of 2.5pc.
Analyst expectations had been wrongfooted by weaker-than-expected performance in businesses’ fixed investments and private domestic investments. –