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Old 06-25-2010, 12:45 PM
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Default Govt. lowers growth estimate for 1st quarter

Stop expecting people will spend when we have so many without jobs. Produce the dang jobs we hear about but don't see.

Government lowers growth estimate for 1st quarter

By CHRISTOPHER S. RUGABER, AP Economics Writer Christopher S. Rugaber, Ap Economics Writer – 1 hr 13 mins ago

WASHINGTON – The government lowered its estimate of how much the economy grew in the first quarter of the year, noting that consumers spent less than it previously thought.

This isn't going to change much till jobs appear and citizens feel they have a future.

Gross domestic product rose by an annual rate of 2.7 percent in the January-to-March period, the Commerce Department said Friday. That was less than the 3 percent estimate for the quarter that the government released last month. It was also much slower than the 5.6 percent pace in the previous quarter.

The economy has now grown for three consecutive quarters after shrinking for four straight during the recession — the longest contraction since World War II.

In normal times, 2.7 percent growth would be considered healthy. But it's relatively weak for a recovery after a steep recession. After the last sharp downturn in the early 1980s, GDP grew at rates of 7 percent to 9 percent for five straight quarters.

These days "Normal Times is lines outside unemployment offices. The Govt. might want to chage the way they gauge the economy's health. Oh I see they have words for it.

"It's what I call a halfhearted economic advance," said Stuart Hoffman, chief economist at PNC Financial Services Inc. The economy is likely to grow at a similarly modest pace for the rest of the year, he said. That may reduce joblessness, but at a slow pace. He anticipated a slight reduction, from the current rate of 9.7 percent to about 9.3 percent by the end of the year.

The European debt crisis is likely to slow world trade in the second half of the year and businesses may pull back on spending once they have rebuilt their inventories, said Paul Dales, U.S. economist with Capital Economics.

"Overall, the U.S. economy may be performing much better than those in Europe, but this is still the weakest and longest economic recovery in U.S. postwar history," Dales said.
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