US economic growth slowed dramatically in the second quarter, battered by the Asian crisis and strikes at General Motors, but rising wages and vigorous consumer spending point to a near-term pickup.

The Commerce Department yesterday reported that gross domestic product expanded at an annual rate of 1.4 per cent, down sharply from a revised 5.5 per cent in the first three months of the year.

But the second quarter performance was stronger than had been expected by many analysts, who foresaw flat to negative growth in the April-to-June period.

At the White House, President Bill Clinton said that while growth was holding steady, the US was now feeling "the direct, discernible effects of the Asian economic downturn".

The growth figure released yesterday came a day after the Labour Department reported that wages and salaries had risen 0.9 per cent in the second quarter, compared with a gain of 0.8 per cent in the first quarter, and were up 3.8 per cent year-on-year.