Guess what? The Dismal set overshot again:
via WSJ: "The U.S. economy expanded at the slowest pace in two years in the first quarter, as high energy prices helped put a damper on spending by consumers and businesses and forced the already huge trade deficit to widen."
This was the economy’s most sluggish showing since the first quarter of 2003, when economic activity expanded at a 1.9% clip. That suggests the stimulus from 2003 is fading.
"Surging prices for crude oil and gasoline helped to damp both consumer and business spending. Consumer spending, which accounts for more than two-thirds of all U.S. economic activity, rose 3.5%, lower than the 4.2% gain seen in the fourth quarter. Business investment increased 4.7% after rising 14.5% in the fourth quarter, and spending on equipment and software recorded its weakest showing in two years.
The slowdown in spending was largely expected after a weak reading on March retail sales and a 2.8% slide in demand for big-ticket manufactured goods. In Thursday’s report, demand for durable goods was flat after rising 3.9% in the first quarter."
Here’s 15 year chart showing year-over-year GDP — topping and sliding.
click for larger chart
Source: Briefing.com, WSJ
Even worse than the slow growth is the additional prcie inflation: "Chain-weighted GDP price index) a very broad measure of economy-wide inflation) increased at a robust 3.3% rate. According to the WSJ, that’s the fastest rise since an identical jump in the Q1 2001. (Last qaurter was a slower 2.3%).
Of course, none of this bodes well for the longer term macro-economic environment.
UPDATE: April 28, 2005 2:36pm
Some more good charts here
High Energy Prices Place Curb on Economic Growth
U.S. GDP Expanded at 3.1% Rate in 1st Quarter; Spending Cools Off
WALL STREET JOURNAL ONLINE, April 28, 2005 9:52 a.m.