Anxiety mounts as US growth disappoints

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The Independent Online

Economic growth in the US slowed slightly in the first quarter of the year, fuelling fears that the recovery may be beginning to stall.

The economy grew at an annualised rate of 3.2 per cent between January and April, down from 5.6 per cent in the final quarter of 2009 and below the 3.2 per cent analysts had hoped for.

Growth was held back by a slowdown in exports, as well as attempts by public-sector authorities to rein in spending increases. However, consumer spending, which accounts for about 70 per cent of the US economy, continued to rebound strongly, recording annualised growth of 3.6 per cent in the first quarter, up from 1.6 per cent at the end of last year.

However, economists are concerned that the consumer sector may be set to slow again, with America still coping with an unemployment rate of 10 per cent – which has so far proved resistant to President Barack Obama's attempts to get more people in work – and continuing concern about instability in the housing market.

Christina Romer, the chairman of the White House Council of Economic Advisers, said the latest data underlined America's "continued recovery". But Bart van Ark, chief economist of But the global employers' organisation, the Conference Board, warned: "The strength and durability of this recovery remain in question as the economy sails into strong headwinds over the next few quarters."

Paul Ashworth, of Capital Economics, said the US economic recovery was likely to be less impressive than previous rebounds from recession.

"We still expect this recovery to be ultimately a disappointment, with GDP growth slowing from 3 per cent this year to only 1.5 per cent in 2011," he added.