Obama still ‘optimistic’ about economy despite sluggish growth report

President Obama has “optimism” about the economy despite a report of continued sluggish growth in the second quarter, the White House said Friday.

“The president’s optimism about the U.S. economy is widely shared,” said White House press secretary Josh Earnest.

The U.S. economy expanded at a sluggish pace this spring as businesses sharply reduced their stockpiles of goods and spent less on new buildings and equipment.

The Commerce Department said gross domestic product increased at an annual rate of 1.1 percent in the April-June quarter, slightly below the previous estimate of 1.2 percent growth, as businesses cut inventories at the fastest pace since 2011. That decline offset a 4.4 percent increase in consumer spending, which accounts for two-thirds of economic output.

Mr. Earnest said the positive news on consumer spending is “consistent with the strong readings of consumer sentiment that we see in the economy.”

“I think that is indication that the president’s optimism about the economy is shared pretty broadly by the American people,” he said.

Federal Reserve Chairwoman Janet Yellen said Friday that a hike in interest rates is still possible in the near term, citing a rebound in the job market in June and July, and “solid growth” in consumer spending.

Over the past three quarters, the economy has averaged about 1 percent growth, low even by the standards of the weak economic recovery. In the past seven years, growth has averaged about 2.2 percent annually.

Mr. Earnest said the president has “plenty of ideas” for improving the economy, including higher spending on infrastructure.