NATION : Economy Grows at Anemic 1.2% Rate, Stirring Recession Fears

The U.S. economy, skirting along the edges of a recession, sputtered at an anemic annual growth rate of 1.2% from April through June with virtually every economic sector exhibiting weakness, the government said today.

The Commerce Department report on the gross national product--the country’s total output of goods and services--renewed recession fears among private economists. The Bush Administration insisted that weakness in the first half of the year will be followed by a rebound in the last part of 1990.

The Administration said a significant slowdown in inflation would give the Federal Reserve room to lower interest rates and thus spark a rebound in consumer and business activity.

Inflation was the one bright spot in the GNP report. A price index tied to the GNP rose at an annual rate of 3.9% in the April-June quarter, down from a 6.6% spurt in the first three months of the year. Half of the inflation improvement was attributed to a drop in food costs.

But adding to the pessimism of private economists was a significant downward revision in previous GNP estimates that made the economy’s performance for the last year look even weaker than previously believed.