The slowdown of the growth, as reported by the U.S. Commerce Department, raises fears that the economy may not be able to expand enough to decrease the nation’s unemployment rate below 8 percent.
“GDP growth was powered by much stronger consumer spending-especially on autos and recreational vehicles-substantial additions to business inventories, and stronger residential construction. Also, business investments in machinery and software contributed a bit too. Reductions in government spending, nonresidential construction and a slightly widening trade deficit subtracted from growth,” said Peter Morici, an economist and professor at the University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.
The U.S. stock market posted meager gains this morning. Local stocks in the BizTimes Stock Index were led by Strattec Security Corp. (up $2.32 to $22.10), Rockwell Automation Inc. (up $1.17 to $78.67) and A.O. Smith Corp. (up $1.16 to $48.82.