The U.S. economy grew at a modest 2% annual rate in the second quarter, a pace sharply lower than the 3%-plus growth rates seen over the past year. Many analysts believe growth will slow further in coming quarters as global weakness and rising trade tensions exert a toll.
The April-June increase in the gross domestic product, the economy’s total output of goods and services, slipped from a brisk 3.1% gain in the first quarter, the Commerce Department reported Thursday.
The government’s third and final look at second-quarter GDP growth was the same as the previous estimate, although the components were slightly altered. Consumer spending and business investment rose at slower rates than previously estimated, but this was offset by slightly stronger gains in government spending and exports.
In the current quarter, analysts believe GDP is likely growing at the same modest 2% rate, and they are forecasting a similar outcome in the final quarter.
Mortgage rates fall this week
U.S. long-term mortgage rates fell this week following a sharp rise the week before, making September the most volatile month for the key 30-year loan since March.
Mortgage rates have been running near historic lows, spurring prospective homebuyers, amid an uncertain economic outlook. Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year, fixed-rate mortgage dropped to 3.64% from 3.73% last week. By contrast, the average rate stood at 4.72% a year ago.
The average rate for 15-year, fixed-rate home loans declined this week to 3.16% from 3.21% last week.
Health coverage given GM strikers
General Motors now says striking workers will get company-paid health insurance, nine days after telling the union that coverage would be cut off.
The automaker said in an emailed letter to the United Auto Workers dated Wednesday that employee health and well-being are GM’s top priorities.
The about-face came after workers howled and GM received withering criticism from politicians and on social media about cutting off the benefits.
“These irresponsible actions by General Motors are toying with the lives of hundreds of thousands of our UAW families,” UAW Vice President Terry Dittes wrote in a letter Thursday to Scott Sandefur, GM’s vice president of labor relations. Dittes wrote that public sentiment would “see these actions of GM as a shameful act!”
It wasn’t clear how the rhetoric or the health care spat would affect contract talks aimed at ending the strike by 49,000 workers that has shut down manufacturing for nearly two weeks at more than 30 GM plants across the nation.