The US economy grew at a slower annual rate in the second quarter than previously estimated, the Commerce Department said on Friday.
The estimated rise in gross domestic product, the value of goods and services produced, for the period between April and June was revised down from 2.4pc to just 1.6pc, as companies reined in inventories and the trade deficit widened.
The revision – despite beating economists' estimates of a 1.4pc rise – would appear to provide further evidence that the recovery is losing steam.
The cut in growth stemmed from mainly from a "sharp acceleration in imports and sharp deceleration in private inventory investment," the department said.
Business spending on equipment and software was trimmed to 17.6pc from an initial estimate of 21.9pc in the second quarter. First-quarter spending was revised down to a 7.8pc rise from 20.4pc.
"The recovery continues but remains tenuous," Augustine Faucher, economist at Moody's, told AFP.
Federal Reserve chief Ben Bernanke was set to offer a fresh assessment at 3pm (BST) on Friday of the weakening US economy.
Pimco sounds alarm
US economic data are “alarming” signaling the recovery is losing momentum, Mohamed El-Erian, head of the world’s largest bond fund, wrote in an opinion piece in the Washington Post on Friday.
Unemployment is high, consumer credit is shrinking and small companies are having trouble obtaining bank lines of credit, Mr El-Erian, chief excutive of Pacific Investment Management Co (Pimco), said.
“Throughout the summer, data signals have become more alarming,” he wrote. “Current policy approaches here and abroad are unlikely to deliver a durable and robust US recovery.”
The record $239bn Pimco Total Return Fund managed by Bill Gross returned 12.3pc in the past year, beating 66 percent of its peers, according to data compiled by Bloomberg.
Pimco, which managed more than $1.1 trillion of assets as of June 30, according to its website, is a unit of Munich-based insurer Allianz SE.
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