U.S. O.6 percent economic growth in the first quarter of 2007 is the worst result got in over four year period. The anticipated showing was 1.3, twice more than the real one. Moreover, the economy lost its pace of 2.5 percent, which was the showing for the final quarter of the last year.
The GDP 0.6 percent growth was the weakest since 2002, when the US economy was recovering from a recession. At that time the GDP showing was 0.2 percent.
Some economists were predicting that the first quarter of this year would be marked by some downgrade, but not so much. They thought the minimum performance would be 0.8 percent.
GDP is the measure of products and services, which are produced in the USA. It is one of the most important measures of the country's economic situation.
Bond prices fell slightly after the GDP data was published as investors apparently saw it as a sign that official interest rates were less likely to be reduced. Stock futures prices got their gains, while the dollar fell against the euro.
Many economists believe that the situation will improve and the performance of the US GDP will go up.
Concerning unemployment rate, the US have good news. The Labor Department reported that there were fewer people sighed for unemployment benefits during the last week.
The National Association for Business Economics has optimistic predictions for the second quarter of 2007. They think that it will grow to 2.3 percent.
There were other factors that the government didn't evaluate properly. Home building investment was cut by 15.4 percent during the first quarter, which had its impact on the GDP showing going down. This housing market is one of the most serious problems of the US economy.
However the consumer spending went up by 4.4 percent during this first quarter, which is the showing of the economic activity.
Many economists are worried how consumers would act, with the gasoline prices up to 3$ a gallon. This fuel spending leaves less money for other things.- Google Business News
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