Prosperity
by digby
Gee, I can hardly wait for the austerity program to really kick in:
The advance estimate for Q1 GDP came in at 1.8% – a sharp decline from last quarter’s 3.1% but close to Briefing.com consensus of 1.7. The number was, however, well below the WSJ survey estimate average of 2.7. Here is an excerpt from the BEA announcement:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.8% in the first quarter of 2011 (that is, from the fourth quarter to the first quarter) according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 3.1%.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and non-residential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter primarily reflected a sharp upturn in imports, a deceleration in PCE, a larger decrease in federal government spending, and decelerations in non-residential fixed investment and in exports that were partly offset by a sharp upturn in private inventory investment. (More here).
I sure hope it’s temporary. But with the states rapidly contracting their spending and the Feds about to do the same, you can’t help but worry that unless personal consumption really picks up steam in a hurry this doesn’t look great.
This is an interesting experiment in disaster capitalism. Can you push through austerity measures in the face of what feels like a long, protracted crisis rather than an acute jolt? I think we’re about to see.
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