WASHINGTON (9/27/13)--The U.S. economy in the second quarter grew at a quicker pace than in first quarter, with business and government spending strengthening. That indicates the economy was persevering through higher taxes and federal budget cuts (Bloomberg.com and The Wall Street Journal Sept. 26).
U.S. gross domestic product--the widest gauge of all goods and services the economy produces--increased at a 2.5% seasonally adjusted annual rate in the quarter. Economists had forecast a 2.8% second-quarter pace, the Journal said.
Larger increases in worker pay and hiring are necessary to bolster consumer spending--the biggest component of the U.S. economy--because escalating mortgage rates now are holding back the housing recovery, Bloomberg said.
Although the economy has been improving slowly and steadily, its momentum has not sufficiently accelerated, Gennadiy Goldberg, a strategist at TD Securities USA LLC in New York, told Bloomberg.
The Federal Reserve would like to see the economy show more robust growth before it winds down its quantitative easing monetary policy, according to the Fed, said the Journal.