U.S. Economic Growth Pared to 1.8%

April 28, 2011
A 7.9% cut in federal government spending, and a 3.3% cut in spending by local authorities, were factors in the slowdown.

As governments slashed spending, growth slowed sharply in the first quarter to a 1.8%, the Commerce Department said on April 28.

After the growth hummed at a 3.1% pace in the fourth quarter of 2010, the department's first estimate for the January-March period showed weakness in the recovery from the 2008-2009 recession.

A 7.9% cut in federal government spending, and a 3.3% cut in spending by local authorities, were factors in the slowdown.

Also contributing was the sharp rise in fuel and food commodity prices, which slowed personal consumption growth to 2.7% from a 4% pace in the previous quarter.

But, with the recovery feeble and the jobless rate at a still-high 8.8%, Americans also saved more in the quarter, putting away a significant chunk of the period's 8.3% rise in income that came from a temporary cut in payroll taxes granted by the government.

The growth estimate was called an "advance" figure, and the Commerce Department will update and revise the figure over the next two months. But it was in line with economists' estimates of 1.8%.

On April 27 the Federal Reserve lowered its growth estimate for the whole year to 3.1%-3.3%, from its January projection of 3.4%-3.9%.

Copyright Agence France-Presse, 2011

Popular Sponsored Recommendations

Managing Supply Chain Risk in Aerospace and Defense!

Dec. 6, 2023
A&D companies need to adopt digital technologies that enable greater collaboration, active monitoring of leading risk indicators, & integration of supply chain risk factors into...

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Legacy Phone Lines Are Draining Your Profits

Oct. 30, 2023
Copper wire phone line expenses that support emergency devices could be costing your company millions of dollars in wasteful overhead expenses. Rates have been skyrocketing while...

Smarter Savings for Manufacturers - Guide

Sept. 12, 2023
Enhance your service experiences and boost revenue while reducing costs. Learn how one platform can help your business be more agile and productive in today's market.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!