Instant view: Q2 growth tepid; Q1 revised down sharply

Fri Jul 29, 2011 9:15am EDT
 
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NEW YORK (Reuters) - The U.S. economy grew less than expected in the second quarter as consumer spending barely rose amid higher gasoline prices, and growth braked sharply in the prior quarter, a government report showed on Friday.

COMMENTS:

DAVID SEMMENS, U.S. ECONOMIST, STANDARD CHARTERED, NEW YORK

"There is absolutely no good news in this report and one would really hope that it will focus the minds of those in Washington on resolving the debt ceiling issue as soon as possible."

DOUGLAS BORTHWICK, MANAGING DIRECTOR, FAROS TRADING, STAMFORD, CONNECTICUT

"Today's disappointing U.S. GDP data confirms what we have suspected for some time: the end of QE2 will be do to the U.S. economy what a lawnmower does to green shoots. With QE2 now ended and government spending in check given the ongoing debt negotiations, we reiterate our view that the U.S.'s light at the end of the tunnel lies in having a weaker dollar, at least until exports can recover and the U.S. fiscal position can be put back on track."

CHRIS LOWE, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK

"What is worrisome is that each month in the quarter was weaker than the month before. We are looking at another slow quarter in the third quarter but still positive so no recession....At this point growth is so close to zero and confidence is more important than it normally is and the distraction of the debt ceiling fight could make a big difference. A government shutdown would have a big impact as well."

JOHN KILDUFF, PARTNER AT AGAIN CAPITAL LLC IN NEW YORK   Continued...