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
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...   (Associated Press)
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(Newser) – 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.