GDP Growth Slows

The broadest measure of the U.S. economy shows what small businesses have been saying for months: It’s very tough out there.

The Commerce Department’s measure of Gross Domestic Product grew at a 2.4 percent rate in the second quarter, a slowdown from the first quarter’s revised 3.7 percent growth, and just a little lower than economists had expected. Analysts expected 2.5 percent growth.

GDP numbers reflect the total output of the U.S. economy, and in the second quarter, the U.S. economy wasn’t exactly humming along. April and May were strong months, economists believe, but in June, growth slowed, according to MarketWatch. That comes as no surprise, with the unemployment rate hovering around 9.5 percent, consumers keeping a tight rein on spending, and small businesses expressing skepticism in poll after poll.

White House economic adviser Christina Romer pointed to the continued growth as good news. But, she wrote on the White House blog: "This solid rate of growth indicates that the process of steady recovery from the recession continues. Nevertheless, faster growth is needed to bring about substantial reductions in unemployment. Much work clearly remains to be done before the U.S. economy is fully recovered. The comprehensive data revisions released with the report provide further evidence of just how severe the recession has been: the fall in GDP between 2007:Q4 and 2009:Q2 was 4.1%, making this the deepest recession since 1947."

And until small businesses start to feel more positive about the economy, you’re not likely to see that GDP number gain very much. That’s because with high unemployment, consumers are scared to spend. And small businesses account for most of the employment growth in the U.S.

So it’s a vicious cycle, and one Washington politicians on Thursday proved themselves at least temporarily unable to handle.

President Barack Obama was expected to speak about the economy at a Michigan appearance today.

But Republicans Thursday blocked the Senate from considering legislation that aims to get credit flowing again to small businesses.

A vote to limit debate on the Small Business Jobs Act and bring it to a vote failed on 58-42 vote, two short of the 60 votes needed under Senate rules. Republicans complained they were denied the right to offer amendments to the legislation.

The bill would expand Small Business Administration loan programs, provide up to $30 billion in cheap capital to community banks for small business loans, and give small businesses $12 billion in targeted tax cuts.

In an effort to get the 60 votes needed to move forward, Senate Majority Leader Harry Reid, of Nevada, at the last minute agreed to take out an agricultural disaster relief provision that was tacked onto the bill Wednesday night, and allow votes on three Republican amendments, along with Democratic alternatives.

Reid said the Senate won’t return to the bill this week, the Washington Post reports. Small businesses will have to wait until at least September Congress does anything to help.

That’s because Congress is going on vacation. It’s nearly August, after all, and it’s hot in Washington. And it’s time to do some politicking in this election year, as if the politicking hasn’t already been well under way.

Never mind that the economy continues to slip.

Portfolio.com Washington Bureau Chief Kent Hoover contributed to this report.