State, City Cuts Trim U.S. Growth for Record Four Quarters

State and local cuts were a drag on the U.S. economy from April to June for the fourth straight quarter, the longest slide since at least 1947, as governments slashed spending and dismissed employees to balance budgets.

Spending and investment by state and local governments shrank at a 3.4 percent annual rate in the second quarter, matching the decline in the first three months of 2011, the U.S. Commerce Department said today. The fourth consecutive drop is the longest such slump since the government began compiling quarterly data in 1947.