The Commerce Department reported GDP grew at a 2.5 percent pace in the first quarter but don't break out the champagne. Several one-time factors contributed to this seemingly robust performance.
The economy is already slowing and new crises threaten. Most of first quarter growth likely was concentrated in January and February and the economy slowed, and actually may have contracted, in March.
In the fourth quarter, inventory investments and defense purchases were uncharacteristically weak-the former rebounded and the latter declined much less in the New Year. Also, extraordinary year-end corporate bonuses and dividend payments, intended to soften the blow of higher 2013 taxes, pushed up consumer spending early in the first quarter.
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