After climbing 3.7 percent in the first three months of the year, the U.S. economy grew just 2.4 percent in the second quarter, an underwhelming performance that reinforced the reality that the recovery is struggling to find some footing.

Economists blame the anemic growth on a leveling off of consumer spending, a strong indicator of overall economic health. Also contributing to the drag: businesses investing in technology and equipment rather than hiring workers. –JCL

The United States economy expanded at an annual rate of 2.4 percent in the second quarter, after expanding a revised 3.7 percent in the previous three months, the Commerce Department reported on Friday.

Nonresidential fixed investment, which covers items like office buildings and purchases of equipment and software, was a key driver of growth in the second quarter, rocketing up at an annual rate of 17 percent, compared with a 7.8 percent increase in the first. The equipment and software category alone grew at an annual rate of 21.9 percent, the fastest pace in 12 years.

“We’re seeing a sort of handover from consumer spending to capital spending,” said John Ryding, chief economist at RDQ Economics. “The consumer also looks to have saved more than we thought before, which means they’re perhaps further on road to financial adjustment than we thought they were previously.”

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