This news caught my eye today about the current state of the economy. The GDP figures are out and they are not good. GDP, or Gross Domestic Product, is a measure of all goods and services produced in the United States and is considered the best measure of the economy. The Commerce Department reported today that GDP rose a scant 0.6% in the first quarter of the year. This is the worst showing in more than four years.
Blamed for the current slowdown is the ever incresing trade deficit and a decrease by businesses in the purchases that they currently hold in inventory. The elephant in the room, the housing market, has also played a big part in the current slowdown. Perhaps the only thing that kept the economy from going down further was the fact that consumer spending rose a healthy 4.4%. What remains in regards to consumer spending, however, is the effect that higher energy prices will have in the future.
Economists, ever optimistic, feel confident that growth will expand the remainder of the year, but I personally have doubts about this. The housing market doesn't appear to be improving anytime soon and many speak of recession fears. Also, I don't see an end to the higher energy prices given the current political climate.
No comments:
Post a Comment