Morning Market Roundup: U.S. GDP Falls to 2.2 Percent, Oil Down, Spain’s Woes
- Posted on April 27, 2012 at 9:44am by
Becket Adams
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Here’s what’s important in the financial world this morning:
U.S. GDP: The U.S. economy grew at a snail’s pace in the first three months of this year.
The Commerce Department estimated Friday that the economy grew at an annual rate of 2.2 percent in the January-March quarter, compared with a 3 percent gain in the final quarter of 2011.
“While that was below economists’ expectations for a 2.5 percent pace, a surge in consumer spending took some of the sting from the report and growth was still stronger than analysts’ predictions early in the quarter for an expansion below 1.5 percent,” Reuters reports.
Chris Williamson, chief economist with the research firm Markit in London, pointed to a 2.1 percent annualized drop in business investment as a “big disappointment.”
He said the decline “serves as a reminder that business remains wary of expansion, given the uncertain economic outlook.”
And investment in equipment and software rose at just a 1.7 percent annual rate. That was the slowest pace since the Great Recession ended in mid-2009.
A growth rate of 2.5 percent or higher is considered good when the economy is healthy. But with 12.7 million people unemployed, faster growth is needed to boost hiring. Under one rule of thumb, the economy must grow roughly 4 percent for a full year to lower the unemployment rate, now 8.2 percent, by 1 percentage point.
“Politically speaking, this makes the White House’s ‘we’re on the right track’ argument a little more difficult to make,” Hot Air’s Ed Morrisey writes.
“A 2.2% GDP rate won’t be a disaster on the stump, but the trend is going once again towards another Stagnant Spring. If it gets revised downward in the next two months, Obama will have a tough time talking about the economy. Expect a lot of discussion of dog carriers and condoms in the weeks ahead,” he adds.
EU: Spain’s economic woes deepened Friday as the government revealed that unemployment rose to nearly 25 percent, a day after a credit ratings agency downgraded the country’s debt and warned it faces an uphill battle to get a grip on its finances at a time of recession.
Official figures showed that unemployment has jumped to 24.4 percent in the first quarter of 2012 – the highest rate in the 17-country eurozone – from 22.9 percent in the fourth quarter of 2011. The data showed that another 365,900 people lost their jobs in the first three months of the year, taking the total unemployed to 5.6 million.
The current rate is the highest since 1994, when it reached 24.55 percent. The rate for people under 25 year is now 52 percent, up from 48.5 percent in the previous quarter.
The total number of unemployed increased by 729,400 compared with the first quarter of 2011. The National Statistics Institute said Spain now has 1.7 million households in which no one has work.
Honda: Honda’s January-March profit jumped 61 percent as the Japanese automaker sold more cars and motorcycles in a turnaround from a disaster-battered 2011. It forecast record global sales of 4.3 million vehicles for this fiscal year.
Honda Motor Co., which makes the Accord sedan, Fit subcompact and Asimo robot, reported net profit of 71.5 billion yen ($882.7 million) for the fiscal fourth quarter, up from 44.5 billion yen a year earlier.
The results underline a recovery at all Japanese automakers from the sales plunge that hit last year after the March 11 earthquake and tsunami disrupted the supply of auto parts from northeastern Japan.
Tokyo-based Honda’s quarterly sales improved 8.7 percent to 2.41 trillion yen ($29.7 billion), mainly because of rising sales in Japan and North America.
Oil: Oil prices fell to below $104 a barrel Friday in Asia after Standard & Poor‘s lowered Spain’s credit rating by two notches, re-igniting fears about Europe’s debt crisis.
Benchmark oil for June delivery was down 67 cents to $103.88 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 43 cents to settle at $104.55 in New York on Thursday.
Brent crude for June delivery was down 49 cents at $119.43 per barrel in London
The Associated Press contributed to this report.
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johnrussell
Posted on April 27, 2012 at 9:04pmHow can a large percentage of our population, be so blind.to this president and his actions…unless this has been the game plan…since the hippie movement! Wow you 40% plus American that have closed your brains off and hearing…we are in trouble! Peace and love and harmony have never worked in history and accountability and fairness…with some eyes on the Lord have!!
Report Post »lukerw
Posted on April 27, 2012 at 12:42pmObama is serving Poison… and people are Drinking it Up!
Report Post »cemerius
Posted on April 27, 2012 at 10:16amSo far so good….we aren’t exactly stagnant +2.2% is still momentuum forward…..although IF this “man-child” could honestly channel the Gipper, he may see the GDP growth look like today‘s unemeployment and unemployment at today’s GDP growth percentages!!!
GDP—8.2%
Unemployment—2.2%
Bring back our country’s standards throw this communist OUT of the Whitehouse!!!!
Report Post »Blackhawk1
Posted on April 27, 2012 at 10:41am“Under one rule of thumb, the economy must grow roughly 4 percent for a full year to lower the unemployment rate, now 8.2 percent, by 1 percentage point.”
Unless you are in the Obama Administration where they just make up numbers so Obama looks like he is doing something. I’m still wondering how 2 million jobs just evaporate and that somehow equates to a lower unemployment number? I would also like to know how the Obama Labor Dept can revise unemployment numbers UP after a week but the unemployment rate stays the same? The real unemployment rate if they were honest (not a chance with liberals) would be still over 10%.
Report Post »MrKnowItAll
Posted on April 27, 2012 at 10:12amLook at my Printing Press in my Photo. I cannot use it. Everything I used for 45 years, with the first 30 years with no warning labels, no ventilation requirements, No Safety Cover regulations that cut your production by 80%. I am a third Generation Printer. I’m getting old. It looks like I’m the last. I can’t even open the Business I love and wanted to pass on to my children and grandchildren. I know many people could care less. It’s been my life. It gave me so much time with my father. It’s a Million times better quality than the Printing you get now. I can do it faster and MUCH, Much Cheaper. My machine sits in my garage. All I can do is look at it. I believe in God. I also believe that as everything else on Earth. The Earth will Naturally Die Also. Regulations will not slow it down or stop that from happening. If I could open. Within one year I could employ a minimum of twenty people. Who cares? I do! I really do not see anything changing. Your stuck with the low quality, high priced laser and computer printing.
Report Post »scuba13
Posted on April 27, 2012 at 10:26amAre you related to ITSJUSTTIM? Because you are making no sense at all.
Report Post »PatriotDadOfSix
Posted on April 27, 2012 at 12:04pmThe point was by Knowitall, that he’s been regulated into shutting his doors and dismantling is business. Made perfect sense to me.
Report Post »doomytram
Posted on April 27, 2012 at 10:03amRecovery Summer III – Oblamer and Bite Me‘s Reign of Terror Continue’s
Report Post »garyganu
Posted on April 27, 2012 at 9:59amDestroying the US economy is a goal of the Obama administration. Wealthy is evil and poor is virtuous in this upside-down world of today’s liberals.
Report Post »ChiefGeorge
Posted on April 27, 2012 at 10:40amYep!
Report Post »TSUNAMI-22
Posted on April 27, 2012 at 11:01am…..and Bernanke is chompin’ at the bit to dump a trillion on Europe.
Flogging needs to be brought back into mainstream punishment.
Report Post »HKS
Posted on April 27, 2012 at 9:57amThis administration is taking all the incentive out of doing anything anymore but line up for a handout. Why take any risk, doing nothing pays better although not for long as we all shall see soon enough. Regulations are killing every sector and the commies love it, right on schedule.
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