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Real GDP grew 1.3 percent second quarter

Real GDP grew 1.3 percent second quarter
U.S. President Barack Obama. GDP in the second quarter rose at a meager annual rate of 1.3 percent in the second quarter, deepening the Great Recession's impact. UPI/Leslie E. Kossoff/POOL | License Photo

WASHINGTON, July 29 (UPI) -- The Commerce Department said Friday the U.S. real gross domestic product in the second quarter rose at an annual rate of 1.3 percent.

Austan Goolsbee, chairman of the White House Council of Economic Advisers, said the advanced figure reflects "a fragile moment in the world economy," showing, once again, "that the Great Recession -- the worst on record -- was even deeper than originally estimated."

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The Commerce Department lowered its first-quarter figure to GDP growth of 0.4 percent in real terms, which accounts for price changes.

Goolsbee said the report "underscores the need for bipartisan action to help the private sector and the economy grow -- such as measures to extend the payroll tax cut and unemployment insurance."

The report showed net exports up 0.6 percentage points and defense spending up 0.4 percentage points.

However, public spending not related to defense fell, as did spending by state and municipal governments, down 0.2 percentage points and 0.4 percentage points, respectively.

Consumer spending rose a marginal 0.1 percent at an annual rate "with a steep decline -- 23 percent -- in motor vehicle consumption accounting for the weakness," Goolsbee said in a statement.

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University of Maryland economist Peter Morici listed some underlying factors.

"Higher oil prices, Wall Street contracting and local governments retrenching are killing growth," he said in a statement.

"All on top of a huge trade deficit with China."

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