WASHINGTON (AP) — The latest revision on second-quarter growth, at a pace of 1.7 percent, was a tad higher than the estimate a month ago. þþThe Commerce Department said the economy grew at an annual rate of 1.7 percent in the quarter, revised from 1.6 percent. þþStill, that marks a sharp slowdown from a 3.7 percent rate in the first quarter and does not change the big picture: The economy has been losing momentum since the end of last year. þþMany economists think the economy grew at around the same anemic pace, or slightly worse, during the July-to-September quarter. Little improvement is expected in the final quarter of 2010, which is why unemployment — now at 9.6 percent — is expected to stay high or even rise in the coming months. þþAmericans just are not spending at a robust pace to bulk up companies’ sales and make them confident enough to beef up hiring. Consumers and businesses, battered by the worst recession since the 1930s, are clinging to their cautious ways. þþConsumers, in particular, are paring down debt, are not spending as much as they normally do during an economic recovery and they are saving more. Their spending accounts for roughly 70 percent of economic activity, so their frugal behavior explains why the economy is stuck in a slow-growth rut. þþIn the second quarter, Americans saved 5.9 percent of their disposable income, the most in a year. Before the recession, they saved 2.1 percent. þþThe sharp drop off in G.D.P. in the second quarter mainly reflected fallout from a bigger trade deficit. A surge in imported goods swamped growth in exports to other countries. The bigger trade gap that resulted shaved 3.5 percentage points from second quarter growth, the most since 1947. þþIn another report released Thursday, applications for jobless benefits dropped last week for the third time in four weeks, a sign that employers are cutting fewer jobs. þþInitial claims for unemployment aid fell by 16,000 to a seasonally adjusted 453,000, the Labor Department said. Wall Street analysts had expected a smaller drop. þþThe decline means jobless claims have returned to the same level they were two weeks ago. Initial claims have fluctuated around 450,000 for most of this year. þþThe four-week average of claims, a less-volatile measure, dropped for the fifth consecutive week, to 458,000, the lowest level in two months. þþApplications for unemployment benefits, while volatile, provide a real-time snapshot of the job market. The weekly claims figures are considered a measure of the pace of layoffs and an indication of companies’ willingness to hire. þþInitial claims have fallen sharply since June 2009, the month the recession ended. They topped 600,000 at the end of that month. But most of that decline took place last year. þþThe number of people continuing to receive jobless benefits fell by 83,000 to just below 4.5 million, the department said. But that doesn’t include several million people who are receiving unemployment aid under extended programs approved by Congress during the recession. þþThe extended benefit rolls dropped by about 300,000 to 4.9 million in the week ending Sept. 11, the latest data available. All told, about 8.8 million people received unemployment aid that week. þ
Source: NY Times
