Economic Trouble Ahead?

The government reported a double dose of troubling economic news today: slowing growth and rising inflation.

The economy grew at an annual rate of only 2.5% in the second three months of 2006, the Commerce Department reported.

That is less than half of the 5.6% rate of the first three months of the year.

Economists had universally forecast a slowdown from the first three months, which got a boost from the recovery from Hurricane Katrina, but the consensus of the profession was 3%, half a point higher than the figure reported by the Commerce Department.

Meanwhile, the price index for personal consumption expenditures excluding volatile food and energy purchases registered 2.9% in the second quarter of 2006.

Read more here.