GDP Grows at 3.2 Percent Per Year Pace in Q1
The big macroeconomic news today is that the United States’ GDP grew at a 3.2 percent per year pace in the first quarter — the third straight quarter of strong growth, weaker than the 5.6 percent pace in the fourth quarter of 2009 and right in line with economists’ expectations.
The Bureau of Economic Analysis cites growth in personal consumption (that is, consumer spending), private inventory investment (stores restocking their shelves), exports and nonresidential fixed investment (business purchases of things like wells, hotels, computer systems and plumbing) as the major factors accounting for the growth. Consumer spending increased at a 3.6 percent pace, the strongest in more than three years.
Of course, GDP is just one number among many. But the slowdown in its pace of growth is a sign of how strong the headwinds remain as the government withdraws its crisis programs and unemployment remains high (a lag on GDP growth, because all those unemployed people are not producing much, nor are they consuming much). The stronger the growth, the faster the United States fills its output gap.