U.S. Economic Growth Softening

The pace of economic growth softened more sharply than expected in the second quarter and corporate profits rose feebly, according to a Commerce Department report on Thursday that pointed to a significant easing in expansion.

Gross domestic product, which measures total economic activity within United States borders, advanced at a revised 2.6 percent annual rate, down from the 2.9 percent estimated a month ago and less than half the first quarter’s 5.6 percent rate.

Prices continued to bubble higher.

An inflation gauge favored by the Federal Reserve — a measure of personal consumption spending that excludes food and energy — rose at a revised 2.7 percent rate instead of the 2.8 percent reported a month ago. But that was still well above the first quarter’s 2.1 percent and was the highest since the 2.8 percent rate posted in the first quarter of 2001.

A separate report from the Labor Department showed new claims for unemployment pay dipped 6,000 last week to a seasonally adjusted 316,000, a level considered by economists to show a healthy hiring environment. The four-week moving average of new claims, which irons out volatile weekly data to provide a better picture of underlying labor market trends, nudged down 500 last week, to 315,500.

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