Since the beginning of the year, incoming data have generally shown positive signs for moderate growth in the US economy. There were ups and downs; however, surprises were mostly to the upside and economists upgraded their consensus real GDP growth forecast for 1Q 2012 to 2.5-3.0% from 2.0-2.5%. Stronger-than-expected increase in wholesale inventories and a sharp decline in real imports in February were the reasons cited.
The jobless recovery continues…As Goldman Sachs noted “2009 was the ‘Year of Survival’, as the market priced out depression risk. 2010 was the ‘Year of Doubt’, as the market worried about the sustainability of recovery in the face of the European sovereign crisis and a significant US slowing. 2011 may be the ‘Year of Recovery’, as the market finally begins to believe in a more sustainable expansion.”
The advanced estimate for the first quarter GDP came in at 1.8% which is down from 3.1% in the fourth quarter of 2010.
According to the Bureau of Economic Analysis the deceleration in real GDP in the first quarter primarily reflected a sharp upturn in imports, a deceleration in consumer spending, a larger decrease in federal government spending, decelerations in nonresidential fixed investment and in exports that were partly offset by a sharp upturn in private inventory investment.
Gross Domestic Product (GDP), the value of all goods and services produced, rose at an annual rate of 2.0% for the third quarter of 2010 after climbing 1.7% in the second quarter. Consensus expectations of GDP ranged from 1.5% to 2.3%.
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