US growth weak in Q2 as Q1 figure slashed

US GDP growth for Q2 has fallen short of analysts' expectations at 1.3%, while the Q1 figure has been sharply revised down from 1.9% to 0.4%.

The figure is considerably lower than forecasts of about 1.8%, heightening fears Barack Obama's fiscal stimulus is not working. Consumer spending was blamed as the biggest driver behind the disappointing figures, hitting a two-year low of 0.1%. The slowdown in growth comes days before the 2 August deadline to raise the country's debt ceiling and avert a default and the loss of its prized AAA-credit rating. The Republicans and Democrats have so far been unable to reach an agreement on the debt ceiling, with both parties at loggerheads over whether to raise taxes or slash spending to...