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Meanwhile, The Real Economy Is Stalling

Estimates of U.S. economic growth went from bad to horrible this morning.

In the first three months of this year, the economy grew at an annual rate of only 0.4 percent — down from an earlier estimate of 1.9 percent.

In the second three months of the year, the growth rate was an estimated 1.3 percent — still very low, and well below what economists were predicting.

(This is a preliminary estimate, and subject to major revisions; here's the full release from the Commerce Department.)

The details show that we're still very much in a two-speed recovery, with businesses growing and consumers treading water.

In the second quarter, personal consumption — which makes up the bulk of U.S. economic activity — was basically flat (it rose by 0.1 percent). This is not terribly surprising, given that the unemployment rate ticked up to 9.2 percent during the same period.

But exports continued to increase, and business spending on things like factories, equipment and software was up sharply.

Over the long run, the U.S. economy has grown by an average of more than 3 percent a year.