U.S. 2nd quarter growth revised up to 1.3%

WASHINGTON -- The economy grew slightly faster in the spring than previously estimated but remained dangerously weak in the face of high unemployment and higher gas prices. Many economists foresee slightly better growth in the current July-September quarter.

The annual growth rate was 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago, the U.S. Commerce Department said Thursday. The improvement reflected modestly more consumer spending and a bigger boost from trade.

Even with the upward revision, the economy grew at an annual rate of just 0.9 percent in the first six months of the year. That's the weakest six-month performance since the recession ended more than two years ago.

Though most economists don't expect another recession, they don't see growth accelerating enough to lower the unemployment rate, which was 9.1 percent in August. Many predict a rebound to growth of between 2 percent and 2.5 percent in the current quarter.

Bloomberg News reported that slower global markets may limit growth in exports and business spending, which has bolstered U.S. manufacturing, a pillar of the expansion. The lack of hiring and depressed consumer confidence add to concerns the economy is still facing "significant" risks, helping explain why Federal Reserve policy makers took another step this month to revive the recovery.

"The third quarter did get off to a better start but there's been a loss of momentum in the economy," said Jim O'Sullivan, chief economist at MF Global Inc. in Manhattan, said in a quote to Bloomberg News. O'Sullivan, who correctly forecast second-quarter GDP, continued. "With consumer confidence down and equity markets down, the best hope is sluggish growth for the next few months." GDP projections of 80 economists in the survey ranged from 1 percent to 1.5 percent. The government's GDP estimate is the third and final one for the quarter.