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Friday, 27 Jul 2012 10:35 AM

 

U.S. economic growth slowed as expected in the second quarter as consumers spent at their slowest pace in a year, increasing pressure on policymakers to do more to bolster the recovery.

Gross domestic product expanded at a 1.5 percent annual rate between April and June, the weakest pace of growth since the third quarter of 2011, the Commerce Department said on Friday.

First-quarter growth was revised up to a 2.0 percent pace from the previously reported 1.9 percent. Output for the fourth quarter was raised to a 4.1 percent rate from 3.0 percent.

"This is the sign...that policymakers must act to provide more support to the economy if they want it to grow fast enough to start putting sustained downward pressure on today's still too-high unemployment rate," said Josh Bivens, research and policy director at the Economic Policy Institute.

Republicans, meanwhile, seized on the Commerce report as more evidence of President Obama's mismanaging of the economy during the worst downturn since the Great Depression. They also used the report to build their case for extending all the Bush-era tax rates before they expire at the end of the year.

"Today's GDP report is a troubling sign for the future of our economy, and it underscores the need to stop all of the looming tax hikes that will weaken it further," House Speaker John Boehner said, Fox News reported.

"Today's weak GDP number is just more devastating news for struggling American families. Our economy is growing far too slowly, proving President Obama's lack of focus on jobs is taking its toll," said Republican National Committee Chairman Reince Priebus.

"The president claims to be fighting for middle class jobs, but he has not had a Daily Economic Briefing on his official schedule in over a year," Priebus said. "He also has not bothered to meet with his Jobs Council in over six months, but he did manage to attend over 110 fundraisers and play 10 rounds of golf in that time. Clearly, he has revealed his true priorities.

"Instead of spending his time fighting for American jobs, President Obama is working desperately to save his own. As a result, 23 million Americans are struggling for work. We need a new president who understands how the economy works and who will make job creation his number one priority. Mitt Romney will be that president."

The Mitt Romney campaign pointed to the figure as the latest sign the economy under Obama simply cannot produce enough growth to put millions of jobless Americans back to work.

"It's a picture of a decelerating economy," said Romney economic adviser Dean Glenn Hubbard. "At that pattern, the economy simply will never return to full employment."

A campaign email with a snapshot of the gloomy GDP headlines also poked at Obama's recent "you didn't build that" gaffe. The email was titled: "The Obama Economy: Barack Obama Built This," Fox reported.

The ailing economy could cost President Obama a second term in office when Americans vote in November.