July 27 (Bloomberg) -- The U.S. economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending.
Gross domestic product, the value of all goods and services produced, rose at a 1.5 percent annual rate after a revised 2 percent gain in the prior quarter, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.4 percent increase. Household purchases, which account for about 70 percent of the world’s largest economy, grew at the slowest pace in a year.
Consumers are cutting back just as Europe’s debt crisis and looming U.S. tax-policy changes dent confidence, hurting sales at companies from United Parcel Service Inc. to Procter & Gamble Co. Cooling growth makes it harder to reduce unemployment, helping explain why Federal Reserve Chairman Ben S. Bernanke has said policy makers stand ready with more stimulus if needed.
“We have an anemic recovery with really no momentum,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “It’s reflective of uncertainty in the global outlook. It’s a frustrating picture for policy makers. The report is supportive of further easing.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.4 percent to 1,360.3 at 8:55 a.m. in New York.
Forecasts of 82 economists in the survey ranged from gains of 0.7 percent to 1.9 percent. The GDP estimate is the first of three for the quarter, with the other releases scheduled for August and September when more information becomes available.
With today’s release, the Commerce Department’s Bureau of Economic Analysis also issued revisions dating back to the first quarter of 2009. The changes showed the first year of the recovery from the worst recession in the post-World War II era was even weaker than previously estimated.
GDP grew 2.5 percent in the 12 months after the contraction ended in June 2009, compared with the 3.3 percent gain previously reported, the Commerce Department said.
The final quarter of last year was revised up to a 4.1 percent gain, the best performance in almost six years, underscoring a more marked slowdown in the first half of 2012. The fourth quarter gain was previously reported as 3 percent.
Today’s report showed household consumption rose at a 1.5 percent from April through June, down from a 2.4 percent gain in the prior quarter. The median forecast in the Bloomberg survey called for a 1.3 percent advance. Purchases added 1.05 percentage points to growth.