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U.S. real gross domestic product rose at an annual rate of 1.3 percent in the second quarter of 2011, according to the advance estimate released today by the U.S. Bureau of Economic Analysis. However, first-quarter GDP growth was revised down to only 0.4 percent from a previous estimate of 1.9 percent.
“This low growth number in the second quarter, following a large downwardly revised Q1 figure, comes at a bad time, when we are at the brink of political stalemate to avoid the debt default, which could spark a global financial crisis and send the U.S. economy back into recession,” said Kathy Bostjancic, director of macroeconomic analysis, The Conference Board.
“From the perspective of business cycle dynamics, however, the probability of recession remains low,” Bostjancic said. “Anemic consumption, still declining state and local government spending, tepid business investment, and soft housing activity all combined to offset some strength in exports. Concerns about the weak labor market and rising food and energy prices continue to weigh on consumer confidence. Business sentiment is not more optimistic than consumers, in general, and likely to result in no more than moderate expansion of business investment. The more bullish forecasters that believe we are only experiencing a cyclical soft patch are likely to be disappointed when growth struggles to get above 2 percent in the second half of the year.”
Growth in most segments of the staffing industry correlates with growth in GDP, according to research from Staffing Industry Analysts. Staffing industry revenue tends to grow faster as GDP improves.