First-Quarter GDP Growth = 1.8%

The government reported that Q1 GDP growth was 1.8%. That’s pretty bad. Yesterday, Ben Bernanke discussed the economy and why it was weak last quarter. He said that it will probably improve later this year and that some of the problems right now are “transient.”

Not that long ago, folks were expecting growth for Q1 of 4%; then it was 3%. Now it is just 1.8%.

Household purchases, which account for about 70 percent of the economy, rose at a 2.7 percent pace last quarter after a 4 percent gain in the final three months of 2010.

The increase in consumer spending from January through March compared with a 2 percent median forecast in the Bloomberg survey. Purchases added 1.91 percentage points to growth.

Government purchases fell at a 5.2 percent annual rate after a 1.7 percent decrease in the fourth quarter. National defense spending dropped at an 11.7 percent pace, the most since 2005. Federal government spending declined the most in 11 years.

Posted by Eddy Elfenbein on April 28th, 2011 at 8:32 am

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