Digital News Report – The Commerce Department said the economy did grow in the first quarter, but the growth is slower than expected.
Economists had expected GDP to grow three percent, but the Bureau of Economic Analysis found growth to be only 1.8 percent. In the fourth quarter of 2010 the Gross Domestic Product grew at an annual rate of 3.1 percent.
“The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending”, the Bureau of Economic Analysis.
Imports, which increased in the first quarter, are deducted from the GDP.
In their analysis, the bureau said the deceleration in economic growth was primarily caused by an increase in imports and in government spending. Both factors were deducted from the GDP.
There was some good news. “Motor vehicle output added 1.28 percentage points to the first-quarter change in real GDP”, the Bureau said. Computer sales were also higher.
By Sam Lee