US second quarter GDP was weaker than expected - and first quarter growth has been revised down

 
Helen Cahill
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Economists were expecting a more positive outlook from the US (Source: Getty)

US GDP has missed expectations in the second quarter coming in at 1.2 per cent - far below the forecast 2.5 per cent.

To make things worse, GDP growth in the first quarter was also revised downwards from 1.1 per cent to 0.8 per cent. Consumer spending - which makes up most of US GDP - grew at 4.2 per cent.

Read more: Has the US Fed left it too late to normalise monetary policy?

A poll of economists by Bloomberg expected GDP in the world's largest economy to be 2.5 per cent.

Dennis de Jong, managing director at UFX.com, said the numbers show America is "facing a new set of challenges in sluggish growth and weak spending."

He added: "Regaining momentum in the wake of an unsettled European market will be the next challenge for Janet Yellen and co. If the US economy can get back on track and prove to be resilient in the face of Brexit then Yellen may just think it’s time for another interest rate hike come autumn."

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