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U.S. economy slows to .7% rate in spring

SHARE U.S. economy slows to .7% rate in spring

WASHINGTON — The U.S. economy slowed to a barely discernible 0.7 percent growth rate in the spring, the weakest performance in eight years, as businesses cut back on their investment spending by the largest amount in nearly two decades.

The meager advance in the gross domestic product — the country's total output of goods and services — in the April-June followed an anemic 1.3 percent growth rate in the first quarter and was the poorest showing in the country's yearlong economic slowdown, the Commerce Department reported Friday.

The weakness in the second quarter came from a huge 13.6 percent cutback in spending on new plants and equipment by American businesses, the steepest reduction since the spring of 1982, when the country was bogged down in the worst recession of the post-World War II period.

Some economists had been afraid that the GDP would tip into negative territory in the second quarter, signaling the possible start of the first recession in the United States in 11 years.

While growth remained positive, the rate of expansion was the weakest since a 0.1 percent rate of decline in the first quarter of 1993 as the country was struggling to emerge from the last recession and underscored the dangers still facing the economy.