US economy sluggish during first three months of year

Washington, DC, United States (AHN) – The U.S. economy grew at a meager 1.8 percent during the first quarter of the year, according to the U.S. Commerce Department’s Bureau of Economic Analysis report released Thursday.

That was down from the 3.1 percent growth in real gross domestic product (GDP) registered in the fourth quarter of 2010.

It was the Commerce Department’s second estimate of real GDP for the first quarter of 2011. The 1.8 percent annual growth rate in real GDP was unchanged from the advance report released last month. In addition, it was below the private-sector expectations for an upward revision, the Commerce Department said in a release.

The private sector had expected a 2 percent growth in GDP.

“Today’s report shows little change from the GDP estimates released last month,” said U.S. Commerce Department Chief Economist Mark Doms. “What today’s data does tell us is that corporate profits continue to grow and businesses continue to hire more workers. In the first four months of this year, the economy added 854,000 jobs, and that will help boost our economy further in the quarters ahead.”

Indeed, although unemployment remains high and hiring remains low, the initial estimate for corporate profits is that they grew by $21.9 billion in the first quarter of 2011 to reach $1,700.2 billion.

Real GDP is the output of goods and services produced by labor and property that is located in the U.S. It is expressed as an annualized figure based on what growth would be for the year if it continued at that pace.

A drop in consumer spending contributed to the slowdown in economic growth.

Consumer spending accounts for more than two-thirds of GDP. Growth in consumer spending during the first three months of the year was revised downward from 2.7 percent to 2.2 percent.

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