The economy grew at a faster pace than originally estimated in the first quarter, the government said on Thursday, but the nation remained mired in its most stagnant period of growth in five years.
Gross domestic product, a measure of overall economic growth, expanded at an annual rate of 0.9 percent in the first three months, according to a Commerce Department report. That was higher than the initial estimate, released a month ago, which had put the growth rate at 0.6 percent.
The government revised its figures because imports dipped more than expected in the first quarter, narrowing the trade deficit. Smaller demand for imports meant less money flowed out of American businesses into foreign countries, pushing up domestic bottom lines and, in turn, the overall growth rate.
But demand for imports fell because Americans were buying less. The bleak economic outlook has made many Americans more hesitant to spend, especially on large-scale purchases like cars and kitchen appliances. Though this trend helped nudge the G.D.P. estimate up in the first quarter, it is likely to lead to a retrenchment in the business sector in the coming months.
Indeed, despite the nominal increase in the G.D.P. figure, the revised report still showed an economy struggling to tread water as the housing slump and a crisis of confidence in the credit markets weighed on investments and buying.
Inventories slipped slightly, signaling that businesses are producing fewer goods in anticipation of slack consumer demand. Imports dipped 2.6 percent, revised down from an initial estimate of a 2.5 percent increase. A measure of consumer spending, known as “real final sales growth,” was revised up from last month’s estimate of a decline of 0.2 percent, but only to the still-anemic pace of 0.7 percent.
“There is no end in sight to the economic slump,” Joshua Shapiro, an economist at the research firm MFR, wrote in a note to clients.
The Commerce Department also provides data on inflation, almost all of which remained unchanged from last month’s initial estimate. Prices rose at a 2.6 percent annualized rate in the first quarter, following an increase of 2.4 percent in the final quarter of 2007.
Over all, gross domestic product expanded 0.6 percent at the end of last year, and 4.9 percent in the third quarter of 2007.
Data on the G.D.P. is regularly revised; the Commerce Department’s final estimates for the first quarter will be released June 26.
In a separate report released Thursday, the Labor Department said that the number of new applications for unemployment insurance rose to 372,000 last week, seasonally adjusted. The increase, of 4,000 claims, was slightly more than economists had anticipated.
No comments:
Post a Comment