US economy slumps in second quarter

It grew at an annual rate of just 1

The US economy has dramatically lost momentum in the second quarter of the year.

It grew at an annual rate of just 1.1 per cent, according to the Commerce Department, compared to a 5 per cent growth rate in the last quarter.

New government figures also show last year's recession was worse than previously thought, with the economy actually shrinking in three quarters of 2001.

The second-quarter performance was weaker than the 2.2 per cent growth rate that many analysts had forecast. It marked the most sluggish growth since the third quarter of 2001, when the economy was still mired in a slump.

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Annual revisions to GDP, based on more complete data, showed that the economy last year was in a more fragile state than earlier estimates showed. For all of 2001, the GDP grew by only 0.3 per cent, versus a still-below par 1.2 per cent.

PA