Economy Grew Slightly Faster 1.9 pct. in Q1
- Posted on June 24, 2011 at 9:02am by
Scott Baker
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WASHINGTON (AP) — The U.S. economy expanded a little faster at the beginning of the year than previously estimated. But the pace was still anemic and economists don’t see that changing until later this year.
The Commerce Department on Friday said the economy grew at an annual rate of 1.9 percent in the January-March quarter. That’s not much better than the 1.8 percent rate estimated a month ago. The small upward revision reflected stronger exports and more business spending on stockpiles.
High gas prices were a major reason growth slowed. The impact of those prices is expected carry over into to the current quarter. The economy is growing in the current April-June quarter at a rate of about 2.3 percent, according to an Associated Press survey of 38 top economists.
Economic growth must be stronger to make a noticeable dent in unemployment, which was 9.1 percent last month. The economy would need to grow 5 percent for a whole year to significantly bring down the unemployment rate. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.
A parts shortage stemming from the March 11 earthquake and tsunami in Japan is another reason economists expect sluggish growth this spring. But those supply disruptions may be easing.
Durable goods orders increased 1.9 percent in last month, the Commerce Department said Friday. The rise in demand follows a 2.7 percent decline in April. The inability to get critical component parts in such industries as autos and electronics was a major reason U.S. factory production slowed.
Orders for autos and auto parts rose 0.6 percent in May after having fallen 5.3 percent in April. The rebound supports the view that the supply disruptions are temporary. Many economists predict growth will pick up in the second half of the year.
The economists surveyed by the AP expect growth for the entire year to be around 2.6 percent, down from 2.9 percent in 2010. The Federal Reserve acknowledged the slowdown this year, issuing an updated forecast on Wednesday that put growth this year in a range of 2.7 percent to 2.9 percent.
The spike in gas has forced consumers to spend less on discretionary items that help boost the economy, such as appliances, vacations and furniture. Consumer spending is important because it makes up 70 percent of economic activity.
Consumer spending slowed to a rate of just 2.2 percent in the first three months of the year, just about half the 4 percent pace of spending growth in the previous quarter. That estimate was unchanged from last month.
Government spending fell at an annual rate of 5.8 percent in the first three months of the year, reflecting big cuts in defense spending and state and local government outlays. Housing construction was dropping at an annual rate of 2 percent in the first three months of the year, underscoring that home building remains under severe strains.
Federal Reserve Chairman Ben Bernanke warned that some problems, such as the weak housing market, could persist into next year. Under the Fed’s forecast, growth would improve in the second half of this year but many private economists believe the central bank, even with its downgrade, is being too optimistic.
As a result, the Fed raised its unemployment rate estimate slightly, saying it would not fall below 8.6 percent this year.
The nation will add only about 1.9 million jobs this year and the unemployment rate will fall to only 8.7 percent, according to the AP Economy survey. The economy needs to generate at least 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate, which rose to 9.1 percent in May.
Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months.
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Dabldo
Posted on June 27, 2011 at 8:17amImprovement is too strong a word here, and too early to tell as well. There is NO CLEAR DIRECTION.
Report Post »That is why nothing is moving. Everyone is waiting for the other shoe to drop. Remove the blocks Obama has left and things will take off.
I hear in obama’s voice and choices of words that even he is concerned now that they may have gone too far – too quickly. He lacks most of that starry eyed idealism and enthusiasm he came in with. He is being pushed now by his radical “advisors”. I think he realises to some degree that his veiws don’t work in reality or at the very least, that reality is more complicated than he thought.
Anyone else see traces of this???
jackact
Posted on June 26, 2011 at 1:25pmMore government jobs?
Report Post »powhatan
Posted on June 26, 2011 at 10:08amWhatever..These article change by the hour…it’s improving…oops we meant surprise its not really improving..oh wait new results..if we leave off food and electricity and gas..it’s improving…wait..we lied…..we are surprised by the results, we are encouraged by the results..blah blah blah…
Report Post »MUDFLAPS
Posted on June 24, 2011 at 9:51pmbs
Report Post »Sad4theUS
Posted on June 24, 2011 at 4:34pmRiiiiiiight, I believe they call this “the calm before the storm”? Also known as… another Leftist lie to lull us back to sleep before the storm hits!! News flash folks! The economy is NOT improving… not by a long shot!!! Even though the Lame Stream Media informs us that unemployment is at 9%, that’s a lie, it’s actually at 17%! And we all know George Soros is buying up the Media as fast as he can so that he can control what’s being put out there, so you know we’re only getting half-truths to no truths! It’s much worse then we even realize!! I don’t know if anything can be done at this point to reverse the horrible down-ward spiral that America has gone into… Not with this present government in control!
Report Post »It’s time to turn back to God and cry out to Him for His help and mercy and let Him take control!
But I wonder… Have we become too proud of a Nation to do that?
saranda
Posted on June 24, 2011 at 2:09pmDoes it not embarrass this group that most posts are cheerleading for a declining economy. Patriots my ass.
Report Post »Sam Brown
Posted on June 24, 2011 at 3:35pmEven you lefties are going to suffer from the Obama economy. Nobody is hoping this will happen but the democrats have spent 5 trillion of borrowed money so the economy will tank. Won’t matter what you think then cause you will be busy looking for food, all day and every day.
Report Post »saranda
Posted on June 24, 2011 at 4:34pm13 posts (now 14 with this one) on this article because it is not bad news or running down a lib. The regular posters on here could care less about this country as they are all about bringing down Obama.
Report Post »As a fiscal conservative I am surprised at this news and hope it does not derail the budget cuts we need to make, but at least it is good news on an economy that needs good news.
@sambrown – you may not wish for it to happen but that would make you unique on here. An article about some ancient congresswomen taking an anti Israel stance gets almost 600 comments and good news on the economy gets 14. Patriots my ass.
cntrlfrk
Posted on June 24, 2011 at 1:02pmIt‘s good to see any improvement at all in the face of the constant attacks from the Obama ’Administration’.
The economy will eventually recover, but it will take decades to recover from Obama’s War on Prosperity!!
.
Report Post »Dabldo
Posted on June 27, 2011 at 8:03amI hear in obama’s voice and choices of words that even he is concerned now that they may have gone too far – too quickly. He lacks most of that starry eyed idealism and enthusiasm he came in with. He is being pushed now by his radical “advisors”. I think he realises to some degree that his veiws don’t work in reality or at the very least, that reality is more complicated than he thought.
Report Post »Anyone else see traces of this???
Ibinaround2
Posted on June 24, 2011 at 12:53pmRepublicans unhappy the economy shows a slight improvement………………..despicable!
Report Post »Ibinaround2
Posted on June 24, 2011 at 12:51pmTo the bees assume…………Sounds about right, willing to tank the economy and make other AMERICANS SUFFER! Just so “your party” can win………………….DESPICABLE, are you an American?
Thanks for stating the con’s position publicly.
Report Post »nomercy63
Posted on June 24, 2011 at 12:29pmDon’t believe anything they say!!!!!!!! Too late for that, fool me once shame on you fool me twice shame on me!!!! We only need to grow the economy by 75% a year to pay off all the debt BO has created alone! not to mention all the other presidents before him!
Report Post »wewantchillywilly
Posted on June 24, 2011 at 12:17pmwait til Q2 reports come out…
Report Post »Sam Brown
Posted on June 24, 2011 at 12:05pmNothing but lies, it’s all coming down. Do the math with real numbers and we are going to tank.
Report Post »teddrunk
Posted on June 24, 2011 at 11:10amThat’s like Gen. Custer saying, “My mistake, I only got shot with 19 arrows instead of 20.”
Report Post »Wdawg
Posted on June 24, 2011 at 11:09amwow, good news! at least the economy is growing.
Report Post »The_Bees_Assume
Posted on June 24, 2011 at 11:28amIt is really cool that things continue to improve, but fact is, we have the liberals up against the ropes and if we can keep the pressure up, the economy will be weak all next year and our 2012 Republican landslide will make 2010 look like a fire drill! Then happy days will be OURS again.
Report Post »fastfacts
Posted on June 24, 2011 at 12:27pmTHIS IS OBAMA’S FAILED ECONOMY
The DNC Chairwoman, who obama loves said this: http://tiny.cc/pmtg6
Then Carney tried to back out of that claim: http://tiny.cc/46sb6
Report Post »FREDD The WILSON
Posted on June 24, 2011 at 3:01pmOh goody!!! Happy days are here again!
Not!!!!!
Report Post »michael48
Posted on June 24, 2011 at 10:18pmhow wonderful…we’re going backwards faster…1.9% is better than expected??? Try throwing that trash on the desk of a buss. CEO…add one to the unemployment numbers…
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