Jobless Rate Rises While GDP Rebounds

Economic growth balances looming threat of inflation

By Wesley Oliver, Newser Staff

Posted Aug 3, 2007 12:44 PM CDT

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Jobless Rate Rises While GDP Rebounds — Workers toil on the framework of a new, single-family home being built in the foreground as completed homes hang on a hillside in the background in a development in the east Denver suburb of Aurora, Colo.,in this April 14, 2007 file photo. The nation's unemployment rate edged up to 4.5 percent in April... (Associated Press)

The unemployment rate increased slightly in the second quarter, but the GDP recovered after a lackluster first quarter, providing Wall Street with a mixed report card of the nation’s economy as the Fed meets to determine interest rates. Unemployment ticked up 0.1% to 4.6%, hastened by losses in manufacturing, construction, and government, the WSJ reports.

The GDP grew to 3.4% in the second quarter, and economists are hopeful increased consumer spending will spark even more growth—joblessness is still hovering around 6-year lows. The economy is expected to grow by about 2.5%, and the balance between growth and inflation risk may lead to an interest rate cut at the Fed meeting next week. (More unemployment stories.)

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