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US Economics Slows Down

As the US Commerce department reported, despite the promising expectations the US economics has slowed down in the second quarter of the year 2006. According to the report, gross domestic product (GDP) rose at an annual rate of 2.6% from the month of April till the month of June this year. Gross domestic product measures economic activity within a country. The number is lower than the 2.9% that were expected a month ago and has a long way to go to the 5.6% growth that was reported in the first quarter of the year. This shows, as analysts had confirmed, that the US economics is gradually slowing down.

Marc Pado, U.S. market strategist at Cantor Fitzgerald in San Francisco said: "We`re seeing the economy slow, and the real question is by how much. Everybody is talking about a soft-landing." This growth slowdown helps to justify the decision that was made recently by the Federal Reserve to stop its long run of interest rate rises, and to leave the standard rate at 5.25%.

The Federal Reserve keeps also watching the inflation, which the Commerce Department`s modified figures said had risen at a 2.7% annual rate in the second quarter of the year, down from the original estimation of 2.8%. Some economics experts expect US growth to stay stable between 2.5% and 3% until the end of the year, which will help to decrease some prices pressure.