Economic growth lurches to 1.5 percent
The economy grew at a disappointing 1.5 percent in the second quarter of 2012, well below the pace needed to reduce unemployment.
This chart shows how key sectors of the economy fared in the second quarter of 2012. Housing was a surprising bright spot, but overall growth was disappointing.
Donald Marron/Bureau of Economiuc Analysis
The economy grew at a tepid 1.5% annual rate in the second quarter, according to the latest BEA estimates. That’s far below the pace we need to reduce unemployment.
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Donald B. Marron is director of the Urban-Brookings Tax Policy Center. He previously served as a member of the President's Council of Economic Advisers and as acting director of the Congressional Budget Office.
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Weak growth was driven by a slowdown in consumer spending and continued cuts in government spending (mostly at the state and local level), which overshadowed rapid growth in investment spending on housing–yes, housing–and equipment and software:
Housing investment expanded at almost a 10% rate in the second quarter, its fifth straight quarter of growth. Government spending declined at a 1.4% rate, its eighth straight quarter of decline.
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