WASHINGTON, July 31: In the face of a report that the US economy has been growing at a slower pace than previously thought, the White House said on Wednesday President George W. Bush still believes the economy has underlying strength for future growth.

White House spokesman Ari Fleischer commented after the US Commerce Department said gross domestic product, or GDP, advanced at a listless 1.1 per cent seasonally adjusted annual rate during the April-June second quarter — half the 2.2 per cent pace estimated by Wall Street economists.

“The president does still believe there is strength in the underlying indicators of the economy to support additional growth, continuing to grow later in the year and in the future,” Fleischer told reporters.

He also said the news underscored the importance of Democrats and Republicans working together “to boost the economy,” although he gave no details.

And he said the new GDP data lent truth to Vice President-elect Dick Cheney’s statement in late 2000 that the US economy was faltering.

Meanwhile, the US economy grew at a tepid 1.1 per cent pace in the second quarter, the government said Wednesday in a report that was much lower than economists had forecast.

Wall Street was expecting stronger growth, figuring at around 2.2 per cent for the government’s first estimate of gross domestic product growth.

The report shows a significant cooling of US economic growth, but not a so-called “double dip” recession that some had feared.

The Commerce Department report also revised downward the GDP growth estimate for the first quarter — to 5.0 per cent, from its earlier figure of 6.1 per cent.

The slowdown was led by the trade sector and consumer spending.

The Commerce Department also released annual revisions to GDP data going back to 1999. The revisions show that the recession started sooner, was deeper and lasted longer than previously believed.

Final sales, watched closely by economists as an indicator of growth minus inventory activity, declined at a 0.1-per cent rate in the second quarter, down from a revised 2.4 per cent rise in the first quarter. It marks the first negative quarter of final sales since third quarter 2001.

The GDP chain-weighted price index, a measure of inflation, rose 1.2 per cent, down slightly from a revised 1.3 per cent for the first quarter.

Excluding food and energy prices, the index rose 1.4 per cent, compared to a 1.6 per cent increase in the first quarter.

Another inflation gauge, the consumption price index, rose 2.5 per cent in the second quarter, compared to a 1.1 per cent rise in the first quarter.

Consumer spending slowed in the second quarter, down to 1.9 per cent from the previous quarter’s 3.1 per cent.

Somewhat offsetting the decline, spending on durable goods rose 2.4 per cent, following a 6.3 per cent decline in the first quarter.—Reuters\AFP