l****z 发帖数: 29846 | 1 U.S. Says Economy's Pace of Gains Slowed Amid Revision in Consumer Spending,
Business Investment.
By SARAH PORTLOCK
And JONATHAN HOUSE
WASHINGTON—The U.S. economy expanded at a slower pace than previously
estimated in the first quarter as consumer spending and business investment
were revised sharply downward, indicating a weaker trajectory for the
economy even before growth downshifted in recent months.
The nation's gross domestic product, the broadest measure of all goods and
services produced in the economy, grew at a 1.8% annual rate from January
through March, the Commerce Department said Wednesday. That was less than
the earlier estimate of a 2.4% growth rate.
The revision was due largely to slower growth in consumption, which eased to
a 2.6% gain from the earlier estimate of 3.4%. Consumer spending, which
accounts for two-thirds of economic output, was likely hit by a rise in
payroll taxes at the start of the year and relatively stagnant incomes, two
forces that have pushed the saving rate lower.
Spending on legal services, personal care and health care all were weaker
than previously estimated, the Commerce Department said.
The latest figures raised questions about whether growth will be strong
enough later in the year for the Federal Reserve to start dialing back its $
85-billion-a-month bond buying program. That prospect helped push stocks
higher Wednesday and pushed the yield on the 10-year Treasury note lower,
easing borrowing costs.
BarclaysBARC.LN +2.03% economist Peter Newland said the revised first-
quarter GDP estimate will make it difficult for the economy to grow by 2.3%
to 2.6% this year, as the Fed forecast last week. "It paints a picture of an
economy with clearly less growth momentum at the start of the year than
previously suggested," he said.
In addition, growth in the second quarter, which ends Sunday, could have
been restrained by across-the-board federal spending cuts that took hold.
Those cuts, which began in March, are expected to weigh on government
spending at least through the end of the fiscal year, Sept. 30. They could
undermine growth by trimming direct federal expenditures, hitting firms that
rely on government contracts and hurting workers whose salaries are tied to
the government.
Macroeconomic Advisers, a research firm, expects the economy to expand at a
1.4% annual rate for the second quarter.
Some Fed officials had grown more optimistic about the economy partly
because of the resilience of consumer spending in recent months, offering
hope for even stronger growth later in the year once the economy adjusts to
the government spending cuts.
Fed Chairman Ben Bernanke last week said the "main drag" to growth this year
is federal fiscal policy. "Our judgment is that, given that very heavy
headwind, the fact that the economy is still moving ahead at at least a
moderate pace is indicative that the underlying factors are improving," he
said. "Obviously, we haven't seen the full effect yet of the fiscal-policy
changes. We'll want to see how that evolves as we get through that fiscal
impact. But we're hopeful."
The latest figures raise questions about how much consumers—buoyed by
strengthening housing and jobs markets—will be able to prop up growth for
the second quarter and offset cuts from the government sector.
"The lower consumption estimate provides some indication that the impact
from fiscal austerity may have been more than previously thought, and that
the economy started the year on weaker footing than previous estimated,"
said Millan Mulraine, director of U.S. research at TD Securities. "Some of
this weakness should persist" in the current quarter, he said.
Some analysts discounted the importance of the latest GDP revision. Pierpont
Securities economist Stephen Stanley said the bulk of the downward revision
came from services expenditures categories that are hard to measure and "
are not reflective of sharp weakness in cyclically-sensitive elements of
consumer spending."
The economy has grown for 15 consecutive quarters, but the pace of those
gains—about a 2% rate—is among the weakest for recoveries since World War
II. In the fourth quarter of 2012, the economy expanded at just a 0.4% pace.
The latest figures showed a weaker path for the economy in key areas beyond
the consumer sector.
Business investment was far slower than previously estimated, with a final
reading of only 0.4% growth, compared with a 2.2% gain in the earlier report
. Companies decreased spending on structures—particularly power and
communication infrastructure—and equipment and software.
Exports were weaker than first estimated, though a decline in imports, which
subtracts from GDP, helped neutralize the impact on overall growth.
Government spending was relatively unchanged from earlier estimates but was
still a drag on growth. Federal spending, which doesn't include transfer
payments such as Social Security, declined at a 8.7% annual pace during the
first quarter, matching the earlier reading. Spending at the state and local
level fell at a 2.1% pace.
Corporate profits shrank less than previously thought in the first quarter.
Income after taxes and not adjusted for inventories and capital consumption
decreased 1.4% from the fourth quarter of 2012, but was up 4.7% from a year
earlier. The after-tax figures are similar to what companies would report in
quarterly accounting.
The housing market remained a bright spot. Residential investment, which
includes home building and improvements, advanced at a stronger pace—14%—
than previously thought. The sector has contributed to overall growth for
eight straight quarters. |
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