GDP Plunges to 1.9%

On Thursday, the U.S. Department of Commerce released a report chock full of weak growth figures and worrisome economic signals.

The gross domestic product (GDP) dropped from last quarter’s 3.0percent to an anemic 1.9 percent. Over half of first-quarter growthcame from automobile sales. When automobiles are removed from thecalculation, the GDP grew at just 0.7 percent.

 Second-quarter growth estimates of 2.0 percent growth, therefore, may be overly optimistic.

From Reuters:

The government lowered its previous forecastsfor consumer spending and export growth, suggesting the economy had abit less momentum as it entered the second quarter than previouslythought.

Consumer spending, whichaccounts for about 70 percent of U.S. economic activity, increased at a2.5 percent rate in the first quarter, rather than the previouslyreported 2.7 percent pace.

With retail sales falling in April and May, consumer spending for the second quarter may prove softer.

The number of Americans receiving benefitsunder regular state programs after an initial week of aid stands at 3.3million, a decline of just 15,000 individuals.

The U.S. Department of Commerce defines thegross domestic product as “the output of goods and services produced bylabor and property located in the United States.”