(Chris Walker/Chicago Tribune)
Associated Press | The economy grew at a solid 3.2 percent pace during the first quarter
of this year, as consumers boosted their spending by the most in three years.
The Commerce Department’s initial estimate of the economy’s performance in the January-to-March quarter, released Friday, provided more evidence that the economy is strengthening. It marked the third straight quarterly gain as the United States heals from the longest and
deepest recession since the 1930s. Still, growth was weaker than in the fourth quarter of last year, when the economy grew at 5.6 percent.
Consumers rebounded and powered the first-quarter’s growth. They increased their spending at a 3.6 percent pace, the strongest showing since early 2007 — before the economy tipped into a recession. That marked a big improvement from the fourth quarter when consumer spending grew at a lackluster 1.6 percent pace.
Even though consumers aren’t spending as freely as they normally do early in strong economic recoveries, they are spending sufficiently to keep the economy expanding.
Looking ahead, analysts believe consumers will be wary of stepping up spending much further. The unemployment rate is high at 9.7 percent and is expected to stay elevated in the months ahead. Sluggish income growth and problems getting loans could restrain shoppers’ appetite to spend, they say.
The first quarter’s reading on gross domestic product was a tad shy of the 3.4 percent growth rate economists were forecasting. GDP measures the value of all goods and services — from machinery to manicures — produced within the United States. It is the best barometer of the nation’s economic health.
Businesses did their part to help the economy grow in the first quarter. Spending by the federal government helped, too.
Spending by businesses on equipment and software rose at a brisk 13.4 percent pace, following an even bigger 19 percent growth rate in the fourth quarter.
The federal government increased spending at a 1.4 percent pace, after being flat in the prior quarter.
Companies started to restock inventories shrunken during the recession, helping boost factory production and GDP.
Exports grew at a slower pace in the first quarter, while imports rose much faster — reflecting stronger demand by U.S. consumers. That meant the nation’s trade deficit acted as a small drag to GDP in the first quarter. Slower export growth probably reflects less demand coming from major trading partners in Europe because of the debt crisis there, analysts say.
Problems in the real estate market slowed economic activity.
Builders once again trimmed spending on housing projects, following two quarterly gains. Spending on commercial real estate ventures plunged at a 14 percent pace, the seventh straight quarterly decline.
And state and local governments continued to trim spending, another drag on GDP.
So if a Republican were in the white house, would the headline read: Economy’s growth down 56% from Q4?
duhhh, let’s make everything political. Actually, throughout the second half or the first half (and first half of the second half) of Bush’s presidency, new outlets gushed over the economic growth. But citing that would make you remember stuff and that makes your brain hurt.
I guess that hopey, changey thing might work out ok after all.
Too bad for carabou barbie!
After months of saying that the recovery is only powered by government spending, the results are in–the nattering nabobs of the GOP got it wrong.
Thank you President Obama for doing what was right & ignoring the chorus of criticism that came from the party that got us into this mess in the first place.
Ready for more Kool-Aid?
JRCDMC | April 30, 2010 12:00 PM | Reply
After months of saying that the recovery is only powered by government spending, the results are in–the nattering nabobs of the GOP got it wrong.
Thank you President Obama for doing what was right & ignoring the chorus of criticism that came from the party that got us into this mess in the first place.
“And state and local governments continued to trim spending, another drag on GDP.”
I guess the manadatory furlough days and zero COLA are permanent fixtures now. Back to work slaves!
PS. The “company” needs you to work 5/52, so the mandatory furlough day package is being rolled over into a pay cut. The “day off” has been removed from the package. Hope you don’t mind!
All hail Obama! All hail Obama! All hail Obama!
While we’re in the practice of proving the teabag arguments wrong, check out this story (from that liberal rag, the Wall Street Journal) about the American auto industry **GASP** improving in the wake of government intervention.
http://online.wsj.com/article/SB10001424052748704302304575214400843620576.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Wonder if its doing the same for your ad revenue. The US Cellular rollout ad on your front page is so annoying that I will spend the rest of my life pointedly avoiding US Cellular products and/or services.
otp: The Tribune is not a “commie pinko rag”. It is actually very conservative. Know your audience.
Not surprisingly, JRCDMC is unaware of what the unemployment rate was when Democrats took control of Congress and where it’s at today.
Congress, the place where legislation originates and is crafted.
It will take several quarters of annualized growth of between 7%-9% to generate the number of jobs to seriously lower the unemployment rate. High unemployment will be the new ‘normal’, and combined with the massive debt due to the out-of-control spending by Democrats, high taxes will be too.