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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

First-quarter GDP rises at a 3.2 percent rate driven by consumer spending

The U.S. economy grew at a 3.2 percent rate in the first quarter of this year, roughly in line with estimates.

The number, released this morning, is the government's first estimate of U.S. gross domestic product in the first three months of the year. A revised number, based on deeper data, will be released in coming weeks. The government will take two more iterations on the data.

GDP was driven by consumer spending in the first quarter, which was up 3.6 percent, the biggest jump since the first quarter of 2007.

U.S. GDP in the first quarter took a significant step back from the previous quarter, which was expected. In the fourth quarter of 2009, GDP expanded at a rate of 5.6 percent, but that was something of a one-time sugar-surge to the economy as a result of businesses rebuilding their inventory.

During the Great Recession, businesses slashed their inventory -- or what they keep on their shelves -- in order to reduce their costs. But businesses, sensing a recovery, began to build up their inventories in the fourth quarter of last year. That meant more orders to manufacturers to make more goods, and that sent GDP soaring.

But those inventory rebuilds are largely complete, and now the U.S. economy -- which is 70 percent based on consumer spending -- must lure people into stores to buy things.

Spending in the first quarter at the state and local level was down 3.8 percent, which highlights a continuing area of worry for the U.S. economy. Everyone knows how bad things are in California, which some have described as our Greece. But hundreds of state and local governments across the nation similarly are in deep financial trouble.

In healthy times, the U.S. economy grows at about a 5 percent annual clip, so the current number is still well below that. But it could be worse. We could be in Europe. Economists there were forecasting, at best, a 1 percent annual bump in GDP this year. And that was before the Greek debt crisis, which now appears to be spreading to other countries on the Continent and will doubtless affect GDP.

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By Frank Ahrens  |  April 30, 2010; 9:00 AM ET
 | Tags: Business, Consumer spending, GDP, Good, Government, Gross domestic product, Inventory, United States, United States Economy, europe, greece debt crisis, greek debt  
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More demand means more jobs. People working? That must be driving the GOP nuts.

Posted by: camera_eye_11 | April 30, 2010 9:23 AM | Report abuse

Any self-respecting economist would tell you that growth per se doesn't give a clear picture of how healthy the economy is becoming. Notice that the expected growth is fueled by, among other items, consumer spending; and given the traits shown by the population at large,probably this increase will be achieve by acquiring debt. Yet more debt.
Capital investments are lagging, so is employment and exports. The twin deficits keep growing. Those questions are not being fully addressed by the people responsible for the well being of the nation, and the whole world, for that MATTER

Posted by: rancho3chico | April 30, 2010 9:24 AM | Report abuse

When Dick Cheney and his puppet Bush ran up 12.5 trillion dollars of GOP Tax Debt on Dick Cheney's sick pronouncement that "Reagan proved that deficits don't matter." to pay for their Halliburton, KBR and Blackwater Iraq pork; the America hating Limbaugh sycophnats were all for defecits.

The Commie GOP went even further with their Bush/Paulson Welfare for the Wealthy scheme. They wanted One Trillion Dollars, blanket immunities for all including the likes of Bernie Madoff, a blank check "Just in case", Oh and no congresional oversight for all the welfare checks they wanted to give to Wall Streets Welfare Queens.

Now that US President Obama has had to spend less than a trillion dollars to save the US economy and the America hating Limbaugh Sycophnants complain about defecits.

Well I am sure every Democratic Party supporter will hapily pay back the less than one Trillion that US President Obama has used to rescue the American Economy.

BUT it is the Pinko Commie GOP supporters that Owe the US Tax Payer 12.5 Trillion dollars they ran up on the US government credit card.

And hey you America hating Limbaugh Sycophnants you need to pay it NOW!

Posted by: walker1 | April 30, 2010 9:27 AM | Report abuse

Revised again. We will be doing a swan dive like Europe soon.
Has anyone noticed the spike in prices at the grocery store lately?

The economy is in a stall trying to state it any other way is irresponsible on the part of the Administration and the Washington Post.

Wait until the end of June when one million are off the unemployment rolls because they used up there 99 weeks. Things are not looking good.

Posted by: jace1 | April 30, 2010 9:33 AM | Report abuse

Oh no!

Economy is growing and adding jobs. Consumers are spending. THIS IS TERRIBLE! Obama's plan is working!!! It must fail, it has to fail. Bachmann, Beck, Limbaugh, Boehner, TurtleFace, Palin Gingrich all say IT MUST FAIL. It has to fail, otherwise their batcrap crazy "supply side" economics is wrong. Despite all proof to the contrary, they all know that supply side must be correct.

There has to be a dark lining in here somewhere.

Posted by: dpc2003 | April 30, 2010 9:40 AM | Report abuse

Gee, I wonder why there is no mention of a big improvement in the unemployment rate. Could it be that it is still hovering close to 10%? Add to that the millions who have given up looking for work or are on unemployment insurance and will be soon reaching the end of the handout as mentioned before.

Food prices are climbing at an alarming rate so when the money spent for food and the increasing prices for gas,sure, it will add to the growth of spending.

No one I know is convinced this recession, nay, depression, is coming to an end pumped up stats or not.

Posted by: rmilitello | April 30, 2010 9:49 AM | Report abuse

More families delinquent on the mortgage means more spending cash to buy i-pads.

Is this a great country or what ??

Posted by: bandcyuk | April 30, 2010 9:51 AM | Report abuse

Larry Summers Should Resign and Go Home to Goldman

Read the information on the above link to find out WHY White House Economic Advisor Larry Summers, an 'alumnus" of Goldman Sachs, should resign now. The fact is he persists in his position of power, even after the economic reports released today on the 3.2 percent growth rate of this nation, unable to keep up with the losses incurred during the meltdown/recession, in which Goldman has been indicted for having a large, insidious part.

Shame on Larry Summers. Shame on Obama.

Thought you could engineer the news by having this information released on a Friday, didn't you, Larry? Well go back to Goldman where you belong. Summers is a fine example of the clean, outsider government being brought to you by the "Vote for Change," Obama presidency.

Larry, you stick out like a sore thumb, showing us just what kind of "change" we have in the White House today.

Same old, same old Goldman.

Posted by: eyemakeupneeded1 | April 30, 2010 9:53 AM | Report abuse

Gosh! With the stock markets going up, GDP going up, unemployment dropping, the housing market picking up, Iraq War winding down, insurgents and al Qaeda dropping at an increasing rate in Afghanistan, a return of international respect to the United States, inventories dropping that indicate that jobs will become available and perhaps those who were at fault for the economic collapse being brought to task; for a President who continues to get slammed for not knowing what he's doing, it appears he sure does seem to know what he's doing!

Posted by: helloisanyoneoutthere | April 30, 2010 9:55 AM | Report abuse

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