US GDP grew by 0.6 percent in 1st Quarter. Consumer Spending Slows. | CountingPips Forex & Currency Trading Blog

April 30, 2008 - Forex Economic News

US GDP grew by 0.6 percent in 1st Quarter. Consumer Spending Slows.

The U.S. economy grew in the 1st quarter of 2008 according to a release today by the U.S. Commerce Department. The advance estimate report released today showed that the U.S. Gross Domestic Product grew at an annual rate of 0.6 percent in the January to March quarter following a 0.6 percent annual rate of growth in the 4th quarter of 2007. Economic forecasts had expected that the GDP growth would be 0.5 percent for the quarter. Exports continued to contribute positively to the GDP numbers as exports of goods and services increased by 5.5 percent in the quarter after increasing 6.5 percent in the 4th quarter of 2007. Also, contributing positively to the 1st quarter GDP were personal spending, private inventory investment and federal government spending.

A separate report released by the Commerce Department today showed that U.S. personal consumption or consumer spending increased by 1.0 percent in the 1st quarter of 2008. A 1.0 percent increase for the quarter marked the lowest spending increase since 2001 as Americans have been cutting back on spending in a slowing economic environment. Consumer spending is responsible for over two-thirds of economic activity in the U.S. economy. The core personal consumption expenditure, which is seen as a measure of inflation and excludes food and energy prices, increased by 2.2 percent in the 1st quarter following a 2.5 percent increase last quarter.

The U.S. dollar has been mixed in forex trading today before the U.S. interest rate decision. The rate decision will be announced by the Federal Reserve later this afternoon and the Fed is forecasted to reduce the interest rate by 25 basis points from 2.25 percent to 2.00 percent.

Tags: us gdp, gross domestic product, consumer spending, personal expenditure, us dollar, usd

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