WASHINGTON (AP) - Economic growth clocked in at a 2.6 percent pace in the spring, even slower than previously thought. The latest reading on the gross domestic product, released Thursday by the Commerce Department, reinforced expectations that the economy is settling into a spell of somewhat sluggish activity.
The growth rate was weaker than the 2.9 percent figure estimated for the April-to-June quarter a month ago. Many economists were predicting that this estimate would hold and thus there would be no revision to the overall GDP figure.
Gross domestic product measures the value of all goods and services produced within the United States and is considered the best barometer of the country' economic standing.
The government said the downgraded reading for the second quarter was mostly related to less inventory building by businesses. Still, the weakness in the housing sector was vivid. Investment in home building plunged at an annualized rate of 11.1 percent in the spring, the most in 11 years.
The second-quarter slowdown comes after the economy sprinted ahead in the first three months of this year, expanding at a 5.6 percent pace, the strongest spurt in 2 1/2 years.
The economy has shifted into a slower gear due to a number of factors, including the cooling of the once sizzling housing market, the toll of once surging energy prices and the impact of the Federal Reserve's two-year string of interest rate increases.
Economic growth is expected to stay somewhat subdued through the rest of this year.
The National Association for Business Economics is forecasting the economy to expand at a pace of 2.6 percent in the current July-to- September quarter and in the final three months of the year.
With the November elections looming, voters' perceptions of the economy's health may influence their choices at the polls.
President Bush's approval rating on the economy is at 39 percent, according to an AP-Ipsos poll. That remains near his lowest ratings.
