[Ed. – The pattern of the last 6 years, however, has been one of inevitable downgrading within 1-2 quarters of the initial report. Granted, this is an important election year, so the government economists will probably hold off on revising their assessment downward until after November. But it’s a good bet the “1.2% growth” will actually turn out to be shrinkage.]
The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.
Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.
The report raises the risk to the outlook at a time Federal Reserve policy makers are looking for sustained improvement. While consumers were resilient last quarter, businesses were cautious — cutting back on investment and aggressively reducing stockpiles amid weak global markets, heightened uncertainty and the lingering drag from a stronger dollar.