Filled woman at a gas station in Los Angeles, 11 April 2011.
Credit: Reuters/Fred motikani LuciabrosirbiWashington | Thursday, April 28, 2011 1: 37 pm EDT
Washington (Reuters)-another economic growth declined sharply in the first quarter as consumer spending reduced from high gasoline and food prices and sent inflation rose faster in years 2-1/2.
Another report showed Thursday a sudden jump in the number of Americans receiving unemployment benefits last week, which could cast a shadow over expectations of substantial production pick-up in the second quarter.
Slowed GDP growth to an annual rate of 1.8 per cent after last quarter's speed of 3.1 per cent, the Ministry of Commerce. Economists predicted that the 2 percent pace.
With many clouds again due to sharp reductions in defense spending and harsh winter weather, analysts hoped to regain speed economy in the second quarter. The decline in defence spending.
"The disappointing growth because the economy is heading into year momentum. We still believe that the soft patch the economy would improve through this quarter in the second half of the year, "Brian Levitt, economic expert in here in New York.
And encouraged economists that details of the report, and particularly consumer spending, business expenditures on software and equipment, not weak because it was feared that proposed a basis for stronger growth was in place.
Consumer spending accounts for about 70 per cent of economic activity in the United States.
Labor market weakness?
With 25,000 claims for State unemployment benefits last week alluded to 429000 some weakness in the labour market, analysts cautioned against reading too much to win. They said bad weather in some parts of the country and the Easter holiday figure can distort.
However, data suggest improvements in the labour market remains only come reluctantly.
"Behind the downtrend in initial claims that existed since late last year and may only land," omair Sharif, economic expert in RBS in Stamford, Connecticut. But he added: "it seems a bit too early to suggest picked up behind the pace of layoffs".
Hiring accelerated in March and is expected to appear in job creation and remained relatively strong in April next week.
Moderate pace
Prices for us government debt, while lower after data. According to the GDP report is weak and fed monetary policy stance commitment loose after a two-day meeting Wednesday to keep the dollar near three-year low against a basket of currencies.
The fed on Wednesday lowered its growth estimate for the period 2011 to between 3.1 and 3.3 per cent from 3.4 to projections January 3.9 percent.
Some economists estimate the US Central Bank may be slightly optimistic, given the bad start of the year even though most agreed soon would enhance growth.
Find optimism the economy was stronger in the second quarter report shows pending sales of previously owned homes rose 5.1 percent in March. Housing struggles to get out, and is one of the perverse economy.
First quarter growth had declined to withdraw the sharp expansion in consumer spending at a rate of 2.7 percent after rising 4 percent in the fourth quarter.
And higher commodity prices mean consumers had less money to spend on other items. Gasoline prices remain a concern, although expected to stabilize.
Rising inflation
The GDP report said pain is appended food and gasoline prices to strong household.
The inflation measure rose by 3.8 per cent, the fastest rate since the third quarter of 2008 after increasing 1.7 percent in the fourth quarter.
Accelerate scale basic rates, which excludes food and energy costs by 1.5 per cent-faster since the fourth quarter of 2009-0.4 per cent in the fourth quarter. The basic standard is closely watched by Fed officials, who would like to see it closer to 2 percent.
In the first quarter, to provide businesses with greater inventory pick, 43.8 billion dollars after an increase of $ 16.2 billion in the fourth quarter. However, the crowd was smaller than expected, economists and some looked to build more inventories to promote growth in the second quarter.
Add 0.44 percentage point inventories to GDP growth in the first quarter. Except for inventories, infantry economy grew 0.8 percent pace after a brisk rate of 6.7 per cent in the fourth quarter.
Business spending on equipment and software acquired pace, but government spending in a deep recession has suffered since the fourth quarter of 1983.
Build homes not contribution, while investment in infrastructure has declined rapidly since the last quarter of 2009, likely as a result of bad weather.
(Additional reporting by Mark felsenthal; editing by Neil stimbelman)
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