The stock market powered higher on Friday, pushed forward for a second day by promises from European leaders to preserve the union of 17 countries that use the euro.
The Dow Jones industrial average soared 187.73 points, settling at 13,075.66 and blowing through 13,000, a key milestone it hadn’t passed since early May.
Meanwhile, the second-quarter economic slowdown reported by the government Friday points to an economy stuck in low gear as a new look at the recession – it wasn’t as deep as thought and the recovery’s been weaker than first believed – gave new urgency to the presidential campaign.
“If we keep up at this rate, over the next year or two, we will simply never get back to full employment,” said Glenn Hubbard, a top economic adviser to Republican presidential candidate Mitt Romney.
Alan Krueger, a top economic adviser to President Barack Obama, countered that the report proved the value of Obama’s stimulus package of spending and tax cuts. He said the report found state government spending aided by the stimulus increased in 2009, helping cushion the blow of the recession, and that the end of the stimulus since then has cut state and local government spending and weakened the recovery.
Either way, the reports added up to a weak economy.
The U.S. economy grew at a sluggish annualized rate of 1.5 percent during the second quarter, the Commerce Department said, a deceleration from the 1.9 percent growth rate recorded during the first three months of 2012.
Adding to the feeling of economic blah, consumer confidence as measured by the Thomson Reuters/University of Michigan consumer sentiment index slipped in July. The survey, released Friday afternoon, showed that high food prices and weak hiring combined to sink confidence.