U.S. GDP Grows at Slow Pace, Just 1.3%
The economic recovery is grinding to a halt, raising the risk that the U.S. could fall back into recession and tightening the screws on Washington to resolve a debt-ceiling debate that threatens to inflict further damage on a fragile economy.</br></br>Gross domestic product--the sum of goods and services produced in the U.S. and the broadest tally of economic growth--increased at a paltry 1.3% annual rate in the second quarter, the Commerce Department said Friday. First-quarter revisions--down to 0.4% from 1.9%--reflected an economy at a near-standstill early in the year.</br></br>That minimal growth, coming after a recession that new data show was deeper than previously thought, raises doubts about the economy's trajectory for the rest of the year and helps explain the unusually feeble pace of job growth for a recovery entering its third year. Economists generally say a pace of 3% or higher is needed to create jobs.</br></br>"This puts a double dip back on the table," said Justin Wolfers, an economist at the University of Pennsylvania's Wharton School.</br></br>Markets fell on the news, although stocks recovered much of their early losses after President Barack Obama stepped up pressure on Congress to compromise on raising the nation's debt ceiling. The Dow Jones Industrial Average fell 96.87 points Friday, closing at 12143.24.