breaking news

GOVERNMENT SHUTDOWN: What we know now

US economy grew at modest 2.4 pct. rate in Q1


By Martin Crutsinger

AP Economics Writer

WASHINGTON (AP) — The U.S. economy grew at a modest 2.4 percent annual rate from January through March, slightly slower than initially estimated. Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

The Commerce Department said Thursday that economic growth in the first quarter was only marginally below the 2.5 percent annual rate the government had estimated last month. That’s still much faster than the 0.4 percent growth during the October-December quarter.

Most economists think growth is slowing to around a 2 percent annual rate in the April-June quarter as the economy adjusts to federal spending cuts, higher taxes and further global weakness. Still, many say the decline may not be as severe as once thought. That’s because solid hiring, surging home prices and record stock gains should keep consumers spending.

Jennifer Lee, senior economist at BMO Capital Markets, said the small revision to first-quarter growth supported her view that the economy will grow a moderate 2.2 percent for the year, the same as last year.

Still, Lee expects growth to improve to 3.2 percent in 2014, as the job market accelerates and consumers grow more confident in the economy.

Consumer spending accounts for 70 percent of economic activity as measured by the gross domestic product. GDP is the economy’s total output of goods and services, from haircuts and computers to trucks and aircraft carriers.

The government’s second look at first-quarter growth showed that consumer spending roared ahead at a 3.4 percent annual rate. That’s the fastest spending growth in more than two years and even stronger than the 3.2 percent rate estimated last month.


Reader Comments ...


Next Up in Business

Spectrum reports TV streaming app service issues
Spectrum reports TV streaming app service issues

Spectrum customers are reporting service interruptions while attempting to use the Spectrum TV app, the company said on Friday afternoon. “Spectrum customers are experiencing a service interruption while attempting to use the Spectrum TV App. This is causing errors including incorrect login information. Technicians are working diligently to restore...
Amazon raises monthly Prime membership rate
Amazon raises monthly Prime membership rate

The monthly membership fee for Amazon Prime rose Friday from $10.99 to $12.99. Company officials said the annual membership will remain at $99 dollars. Monthly customers do not get access to Amazon Video, which costs $8.99 a month. The last Prime subscription hike came in 2014, when Amazon increased its yearly membership from $79 to $99. The e-commerce...
Starbucks testing out stores that do not accept cash
Starbucks testing out stores that do not accept cash

Starbucks is testing out a cashless checkout in stores nationwide. As of Tuesday, one downtown Seattle store accepts only cards or mobile payments, according to a report from KIRO-7. The coffee chain is receiving mixed reviews from customers, some who like the convenience while others worry about privacy issues. Robert Safian, editor of Fast Company...
Top tips for selling your old stuff on eBay (and actually making cash)
Top tips for selling your old stuff on eBay (and actually making cash)

Too much clutter, too little money, too many gifts you didn't like... an eBay auction is one of the simplest solutions to all three issues. If your trash might be someone else's treasure, an eBay business is simple to start and accessible to just about anyone. "It has low start-up costs and it can be started out of your home," noted the ...
Moldy comforter among latest product recalls
Moldy comforter among latest product recalls

The latest product recalls include a potentially moldy comforter, an unstable bassinette, and snow globes that could potentially cause a fire, according to the Consumer Product Safety Commission.    The Hudson comforters by UGG under recall were sold at Bed Bath & Beyond and may contain mold which could pose a risk of infection or respiratory...
More Stories