GDP = 1.3%
The economy slowed to its weakest pace of gains in 4 years, when GDP was 1.2% during Q1 2003.
Housing gets most of the blame (duh), but do not ignore the accelerating inflation factor as a key element. Most traders realize the Fed is watching that component closely; Hence, why you are not hearing the usual "Rate Cut" chants from the cheap seats. PCE rose 3.4% (it decreased 1.0% Q4) Even the nonsensival core PCE (ex food and energy) was plus 2.2% (following 1.8% Q4).
International trade, Business Capex spending, Inventory growth, and decreased government spending all weighed on the economy to produce that 1.3% number.
The one bright spot: Durable goods. Plus 7.3% in Q1 follows +4.4% in Q4. Pretty much everything else was punk.
Nice table via the WSJ:
|GDP Component||Added (subtracted)|
from GDP (%)
|Residential fixed investment||(0.97)|
|Source: WSJ, Commerce Department|
U.S. Economic Growth Is Slowest In 4 Years Amid Housing Slump
WSJ, April 27, 2007 9:58
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» Economy Slumps, Stagflation Watch Begins from TAM Money and Finance
The faltering housing market placed its stamp on the overall economy with the news that GDP slowed to 1.3% growth in the first quarter of 2007. The negative effects of the housing slump are understandable. What should concern is the possibility of stag... [Read More]
Tracked on Apr 27, 2007 1:38:58 PM
Consumers are still spending like crazy? That leg looks solid on the outside but it's rotting on the inside.
Posted by: wunsacon | Apr 27, 2007 11:42:34 AM
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