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Economy in U.S. Grew Less Than Forecast in First Quarter
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| Contributor | Scott³ |
| Last Edited | Scott³ Apr 27, 2012 10:28am |
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| Category | News |
| Author | Shobhana Chandra |
| News Date | Friday, April 27, 2012 04:25:00 PM UTC0:0 |
| Description | "The U.S. economy expanded less than forecast in the first quarter as the biggest gain in consumer spending in more than a year failed to overcome a diminished contribution from business inventories.
Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2.2 percent annual rate after a 3 percent pace, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 2.5 percent rise. Household purchases increased 2.9 percent, exceeding the most optimistic projection. Homebuilding grew the fastest in almost two years.
Consumer confidence this month unexpectedly rose to the highest level in a year, another report showed, signaling household spending may continue to propel sales at retailers like Target Corp. (TGT) and cushion the economy from cooling business investment and overseas trade. The GDP data confirm the view of Federal Reserve officials who this week said they expect “moderate” growth as they repeated borrowing costs are likely to stay low at least through late 2014.
“Consumers are remarkably stable and steady,” said Julia Coronado, chief economist for North America at BNP Paribas in New York, who correctly estimated first-quarter GDP. “We’ll need to see final demand continue to improve. We’re still in muddling-along territory.” |
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