Friday, April 30, 2010

U.S. Economy Grows for Third Consecutive Quarter

A article today reports figures from the Bureau of Economic Analysis (BEA), showing that gross domestic product (GDP), the broadest measure of the nation's economic activity, rose at a 3.2 percent annual rate in the first quarter of 2010. The report marks the third straight quarter of GDP growth, confirming the view of many economists that the recession that started in December 2007 ended at some point in the middle of last year.

Increased consumer spending was the main driver of growth in the quarter. Household spending is important, since it accounts for more than two-thirds of the nation's overall economic activity. The 3.6 percent rise in consumer spending was the largest quarterly gain in three years.

While there may be signs of greater strength, the report also detailed some of the headwinds facing the economy. Investment in residential real estate fell nearly 11 percent, ending a two-quarter rebound in the sector, and subtracting from overall growth. Commercial real estate investment dropped at a 14 percent rate, although that was a slower pace than in the fourth quarter.

Federal government spending rose 1.4 percent, but the increase was outweighed by a 3.8 percent spending cut in state and local governments dealing with budget crises. That marks the biggest decline in state and government spending since 1981.

For additional details, see the BEA press release (

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