Q1 GDP GROWTH OF 0.6%

According to GDP data released Wednesday, the economy grew at 0.6% in the first quarter of 2008.

From TheStreet.com:

The government reported Wednesday that the U.S. economy grew at a rate of 0.6% in the first quarter of 2008, which was basically in line with expectations on Wall Street.

While GDP growth of 0.6% reflects sluggish activity in the U.S. economy as it muddles through a slowdown in the national housing market and a credit crunch on Wall Street, it also suggests that the nation did avoid recession in the first three months of the year, when many investors were predicting that a recession was underway.

BERNANKE TAKES GRIM VIEW ON ECONOMIC GROWTH POSSIBILITIES

In testimony this morning before a Congressional committee, Federal Reserve chairman Ben Bernanke stated that economic growth was likely to be minimal and that contraction of the economy was possible in the first half of the year. Mr. Bernanke's comments now seem to be in line with those of most reputable economists, who for some time have been stating that it is not only possible, but likely that the United States GDP would contract in the first half of the year. If this does happen, it would become an official recession.

From The New York Times:

Over all, Mr. Bernanke said, “It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly.”

While he said growth would likely recover in the second half of the year, and return to a “sustainable pace” in 2009, he warned that the current turbulence made the economic outlook difficult to predict.

“The uncertainty attending this forecast is quite high and the risks remain to the downside,” he said.

SLOW GROWTH FOR ECONOMY IN Q4

Gross domestic product (GDP), the total value of all goods and services output inside of the U.S. and a favorite macroeconomic measure of national economic health, grew at 0.6% in the fourth quarter of 2007. Most economists and analysts had predicted growth of over 1%. For reference, the target growth rate in the U.S. is 3% or higher and figures in that range generally indicate a reasonably healthy economy.

From Reuters via The New York Times:

Gross domestic product, which measures total goods and services output within U.S. borders, edged up at a weaker-than-expected 0.6 percent annual rate in the fourth quarter and for the full year advanced only 2.2 percent - the slowest growth in annual GDP since 1.6 percent in 2002.

Analysts surveyed by Reuters had forecast that fourth-quarter GDP would grow at a 1.2 percent rate. The lackluster fourth quarter performance followed a booming third quarter when GDP surged at a 4.9 percent rate and is likely to fuel fears the economy is at risk of tumbling into recession in 2008.

Spending on new-home building plunged 23.9 percent in the fourth quarter, the biggest quarterly drop in 26 years, after falling 20.5 percent in the third quarter. Over the course of the full year, residential spending fell 16.9 percent, the worst annual performance since 1982.

GDP COMES IN AT SURPRISING 3.9% FOR 3RD QUARTER

From AP via The New York Times:

The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1 1/2 years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil.

The latest snapshot of the country's economic health, released by the Commerce Department on Wednesday, suggested that the economy is demonstrating much resilience and thus far holding up well to the strains in the housing and credit markets, which had intensified during the third quarter and rocked Wall Street.

Individuals ratcheted up their spending. U.S. businesses sold more goods abroad and boosted some investment at home. Those were some of the main factors helping to push up overall economic activity in the July-to-September quarter.

The third quarter's growth rate was up slightly from a 3.8 percent pace logged in the second quarter. It marked the strongest showing since the first quarter of last year.

The increase in third quarter gross domestic product exceeded analysts' forecasts for a 3.1 percent growth rate for the period. Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness.

Consumers, whose spending is an important ingredient for the economy's good health, actually rediscovered their appetite to spend in the third quarter. Their spending rose at a 3 percent pace, a considerable improvement from the second quarter's rather weak 1.4 percent growth rate.

U.S. GDP GROWTH SLOWS TO 1.3%

Many economists had predicted that first-quarter GDP growth would be 1.8%, but the data released this morning showed even slower growth coming in at 1.3%. That is the worst quarterly performance since Q1 2003.

From USA Today:

The fresh reading on gross domestic product, released by the Commerce Department on Friday, was even weaker than the 2.5% annual growth rate logged in the final three months of last year. The new figures underscored just how much momentum the economy has been losing as it copes with the strain of the troubled housing market, which has made some businesses more cautious in their spending.

A price gauge favored by the Federal Reserve — personal consumption expenditures excluding food and energy items — increased at a 2.2% annual rate in the first quarter, slightly ahead of forecasts for a 2.1% advance. That was up substantially from the fourth quarter's 1.8% annual rate and is likely to keep Fed policymakers wary about the potential for a pickup in inflation.

CHINESE ECONOMY CONTINUES GROWING AT BRISK PACE

GDP data released by the Chinese National Bureau of Statistics Thursday shows that the Chinese economy continues to grow at an amazing pace, up 11.1% for the first quarter of 2007 compared to the same time-frame for 2006.

From The New York Times:

The surge in growth is almost certain to force Beijing to step up efforts to cool the economy. Pressure is also mounting on officials to allow the value of the currency, the yuan, to appreciate more quickly.

Fueled by soaring exports and huge investments in infrastructure, factories and energy supplies, China could soon overtake Germany to become the world’s third-largest economy, behind those of the United States and Japan.

The burst of growth, one of the largest in a decade, came on the heels of four consecutive years of double-digit economic growth, including an increase last year of 10.7%, the fastest annual growth in a decade.

The statistics bureau said that retail sales rose 15%, industrial production was up 18% and exports jumped 28%.

INITIAL U.S. GDP FIGURES SHOW 3.4% GAIN IN 2006

The Commerce Department released its initial fourth quarter gross domestic product figures this morning showing a 3.5% seasonally adjusted annualized growth rate for October through December of 2006. That bested a 2% growth in the third quarter and put the initial 2006 GDP growth at 3.4%, compared to 3.2% in 2005 and 3.9% in 2004.

A closer look at the data released shows that an important inflationary statistic, personal consumption expenditures (PCE), actually declined in the fourth quarter at an annual rate of 0.8%, the biggest drop since 1954 and the first since 1961.

From USA Today:

Excluding volatile food and energy prices, the so-called core PCE index was
up at a 2.1% annual rate, still slightly above the Fed's assumed comfort range
of 1% to 2%. Economists were expecting the core PCE index to advance 2.2%.

WSJ.com

GDP GROWTH REVISED UPWARD

United States third quarter gross domestic product was revised upward from 1.6% to 2.2% for the July through September period of this year. That is a positive sign, but according to an article in The New York Times, other signs, bulging corporate inventories and the deteriorating housing market, point to a steep decline for the rest of the year and economists believe the slide is not over as the economy cools from hot first quarter growth rate of 5.6%.