U.S. Economy Grew in the First Quarter
- May 29, 2008
Washington, D.C.–The economy increased at a 0.9 percent annual rate in the first three months of 2008 due in part to a narrower U.S. trade deficit, according to government data released Thursday.Fueling speculation that the U.S. economy did not enter a recession earlier this year, the first quarter gross domestic product was revised to be higher than the original 0.6 percent annual rate estimate, the Financial Times reported Thursday.Because March imports decreased–along with the U.S. dollar and consumer spending–while exports increased, the GDP revision was not a surprise to many economists. The contribution trade made to first quarter growth was four times greater than original estimates. Strong exports have helped U.S. manufacturers weather economic troubles and may ward off a recession this year. A report released Wednesday showed that, excluding transportation, durable goods orders increased by 2.5 percent last month. The increase was the largest in nine months. Non-residential structures and personal consumption expenditures for non-durable goods were also revised higher than originally reported, which helped bolster the GDP.However, the economy’s future is still unclear, according to the Times; if factors continue to weigh on consumer spending, home prices keep declining and the credit market remains strained, the first quarter growth may prove to be short-lived.