Friday, July 27, 2012

Today's GDP Figure

The first estimate of the nation's second quarter GDP came out this morning from the Commerce Department, and the best thing you can say about it is that it could have been a lot worse. The economy grew at 1.5 percent in the second quarter, which is down some from the first quarter's reading of 2 percent. But the expectation from economists - depending on which survey you believe - had been down to 1.3 or 1.4 percent.

The biggest culprit in the slowing economy is consumer spending. The figures showed that it household consumption grew at 1.5 percent in the quarter, which is the lowest rate of growth we've seen in a year. Spending had grown at a 2.4 percent rate in the first quarter of 2012.

The Commerce Department also released revised and presumably final GDP figures for the previous three years, and while some quarters showed significant changes, the overall differences were minor. For the period from the beginning of 2008 (two months after the official start of the recession) to the end of 2011, the overall rate of GDP growth went from 0.4 percent to 0.3 percent. For 2011 alone, real GDP was revised upward by 0.1 percent. 

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