U.S. Economic Growth Slows, but Not as Much as Investors Feared

The Federal Reserve estimates the annual growth rate is now 1.6 percent. That second-quarter figure is down from the initial estimate of 2.4 percent made last month.

Despite efforts by Washington to stimulate the economy and create jobs, the figures suggest the economy is continuing to slow to a snail's pace.

The decline marks a continued path of digression from a rate of 3.7 percent in the first quarter of this year, and a rate of 5 percent in the last quarter of 2009.

From the New York Times:

The news follows dismal statistics this week on July home sales and factory orders. Economists are now concerned that the outlook for job creation, which has been spluttering all summer, could deteriorate further.

Because forecasters had expected an even worse growth estimate, the markets reacted positively in the first few minutes, as traders awaited a policy speech later on Friday morning from the chairman of the Federal Reserve, Ben S. Bernanke.