Economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in 2-1/2 years.
Another report on Thursday showed a surprise jump in the number of Americans claiming unemployment benefits last week, which could cast a shadow on expectations for a significant pick-up in output in the second quarter.
Growth in gross domestic product slowed to a 1.8 percent annual rate after a 3.1 percent fourth-quarter pace, the Commerce Department said. Economists had expected a 2 percent pace.
With much of the pull back traced back to sharp cuts in defense spending and harsh winter weather, analysts were hopeful the economy would regain speed in the second quarter. The drop in defense spending was seen as temporary.
"Growth was disappointing given the momentum of the economy heading into the year. We are still of the belief that the economy will improve out of the soft patch through this quarter into the second half of the year," said Brian Levitt, an economist at OppenheimerFunds in New York.
Economists were encouraged that details of the report, in particular consumer spending and business outlays on software and equipment, were not as weak as they had feared and said this suggested a foundation for stronger growth was in place.
Consumer spending accounts for about 70 percent of U.S. economic activity.
Read more:
http://news.yahoo.com/s/nm/20110428/ts_nm/us_usa_economy
Related Article:
Thanks, Obama! Real Inflation Up To 10%!
Not only has the federal government been lying to us about the unemployment rate, they’ve also been lying about inflation. The economy is in the crapper, but they want you to believe everything is unicorns and rainbows. CNBC reports that using the old method of calculating inflation comes up with a rate of nearly 10%. It’s like Jimmy Carter is president all over again.
Link:
http://lonelyconservative.com/2011/04/thanks-obama-real-inflation-up-to-10/
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