Perhaps we should lower expectations. We thought we were growing at 2.4%, but it turns out we are only growing at 1.8%. On the bright side, we are definitely better than ZERO growth. For now. Who knows, the government may revise the revised numbers.
The economy in the U.S. grew less than previously calculated in the first quarter, reflecting less spending on services by consumers who were trying to make ends meet after taxes rose. Gross domestic product expanded at a revised 1.8 percent annualized rate from January through March, down from a prior estimate of 2.4 percent. Household purchases, which account for about 70 percent of the economy, were revised to a 2.6 percent advance compared with the 3.4 percent gain estimated last month.
Households cut back on travel, legal services and personal care expenditures and also curbed spending on health care as the two percentage-point increase in the payroll tax caused incomes to drop by the most in more than four years. A housing rebound and improving job market will probably help revive purchases in the second half of the year, one reason economists project the economy can withstand the automatic government budget cuts.
The median forecast of 82 economists surveyed by Bloomberg called for a 2.4 percent rise in GDP, the value of all goods and services produced, the same as the Commerce Department previously estimated.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
GDP QoQ Annualized | 1Q T | 2.4% | 1.8% | 2.4% | |
Personal Consumption | 1Q T | 3.4% | 2.6% | 3.4% | |
GDP Price Index | 1Q T | 1.1% | 1.2% | 1.1% | |
Core PCE QoQ | 1Q T | 1.3% | 1.3% | 1.3% | |
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
225-342-0013
jbroussard@treasury.state.la.us
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