1st Qtr. US GDP Weakens & UK Barely Avoids New Technical Recession
Moody's
Consumer Spending Held Up in the First Quarter
The spike in retail gas prices came late, limiting the damage.
Rising energy prices didn't deter U.S. consumers in the first quarter of 2011, but that may be changing. As retail gasoline prices cross the psychological threshold of $4 per barrel, the hit to both confidence and spending could be palpable....
Econoday.com
Released on 4/28/2011 8:30:00 AM For Q1a PriorConsensusConsensus RangeActual Real GDP - Q/Q change - SAAR3.1 %2.0 %1.5 % to 3.0 %1.8 %GDP price index - Q/Q change - SAAR0.4 %2.2 %1.5 % to 2.5 %1.9 % Highlights
The economy slowed during the first quarter of 2011. However, the detail shows moderate forward momentum. First quarter GDP growth eased to a 1.8 percent annualized pace, following a 3.1 percent boost in the fourth quarter. First quarter growth came in lower than the median projection for 2.0 percent.
The softer growth in the first quarter was largely due to a sharp upturn in imports, a deceleration in personal consumption, a larger decrease in federal government spending, and decelerations in nonresidential fixed investment and in exports that were partly offset by a sharp upturn in private inventory investment...
Director of Finance
UK returns to recession in all but name
Britain is back in recession according to the official growth figures. But luckily for the chancellor, negative economic growth over two quarters is not the same as two quarters of negative growth.
Then economy grew by 0.5 per cent in the first three months of 2011, according to the first estimate from the Office of National Statistics. That comes after a 0.5 per cent fall in the previous quarter - and as any number-cruncher knows, a half per cent increase does not offset a half point fall, so the net effect is to leave the economy slightly below where it started.
Chancellor George Osborne can dismiss that as a mathematical nicety that could be lost in rounding off the numbers, nevermind eliminated (or exaggerated) when the first-quarter figure is revised and revised again. But however he looks at it, it is not only two quarters of negligible growth but nine months without any growth in the economy. Those are the three quarters since Osborne became chancellor.
The technical definition of recession is two consecutive quarters of negative growth. But even if the latest 0.5 per cent increase reflected the steady state of the economy now, it is not a strong figure. In particular, it is much less than the 0.8 per cent the Office of Budget Responsibility forecast less than a month earlier.
And the first three months should have been boosted by the poor preceding quarter when bad winter weather was blamed for the contraction. Companies that lost production before Christmas might have been expected to work overtime to meet orders afterwards, but not only does the early 2011 figure show no bounce, it appears to contain little growth postponed from the previous quarter...