The Lehmann
Letter (SM)
Today's GDP
number was OK. The Commerce Department reported that gross domestic product
grew by 2.2% in the first quarter:
That's not
bad. We had smaller numbers for several quarters in 2011, as the chart
indicates.
There were,
however, some components of interest. Household expenditures on durable goods,
such as motor vehicles, grew strongly. That's not surprising since new-vehicle
sales have been robust in recent months. Residential construction's vigorous performance
was of greater interest because the housing numbers have not been especially
encouraging. Perhaps the first quarter's good winter weather permitted an
unseasonably large amount of construction activity. Housing starts did pop up a
bit in January and February and builders may have done an unusually large
amount of work on structures in progress.
There were also
some disappointing negative numbers. Business investment in plant and equipment
fell after showing recent strength. Sadly, too, both federal and state and
local government spending continued to slide. It's too bad that we've chosen to
curtail government expenditures while the private sector continues to struggle.
GDP Change
(Click on chart to enlarge)
(Recessions
shaded)
But all in all
and all things considered, this has not been a bad quarter.
(To be fully
informed visit http://www.beyourowneconomist.com/)
© 2012
Michael B. Lehmann
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