US economy improves in 2nd Q

Many economists foresee slightly better growth in the current July-September quarter. The annual growth rate was 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago, the Commerce Department said Thursday. The improvement reflected modestly more consumer spending and a bigger boost from trade.Even with the upward revision, the economy grew at an annual rate of just 0.9 percent in the first six months of the year. Thats the weakest six-month performance since the recession ended more than two years ago. Though most economists dont expect another recession, they dont see growth accelerating enough to lower the unemployment rate, which was 9.1 percent in August. Many predict a rebound to growth of between 2 percent and 2.5 percent in the current quarter.In a separate report, the government said the number of Americans seeking unemployment benefits fell sharply last week, an encouraging sign that layoffs are easing. The Labor Department said weekly applications dropped 37,000 to a seasonally adjusted 391,000.Thats the lowest level since April 2. And its the first time that applications have fallen below 400,000 since Aug. 6. A forecasting panel for the National Association for Business Economics predicts total growth for the year will be just 1.7 percent. In January, most economists had predicted 3 to 4 percent growth for the entire year. A Social Security tax cut gave Americans an extra $1,000 to $2,000 in after-tax income. That was expected to buoy consumer spending, which fuels 70 percent of growth.But food and gas prices spiked, and those higher costs forced people to cut back on discretionary items, such as vacations, appliances and computers. The 1.3 percent growth rate in the April-June period followed an even weaker 0.4 percent increase in the first three months of the year.