Consumer spending rebounds

The economy contracted at a 6.1% annual rate in the first quarter, which was a little more than the 4.6% decrease in real GDP expected by economists. The best news in the B.E.A. report report was the rebound in Personal Consumption Expenditures during the first quarter. Consumer spending grew at 2.2% during the first quarter (see graph above) following two quarters of negative growth (-4.3% in 2008:Q4 and -3.9% in 2008:Q3), and was just slightly below the 2.27% average growth since 2001.

REUTERSThere were some bright spots in the report. Consumer spending, which accounts for over two-thirds of U.S. economic activity, rose 2.2%, after collapsing in the second half of last year. Consumer spending was boosted by a 9.4% jump in purchases of durable goods, the first advance after four quarters of decline.

WSJGDP acts as a scoreboard for the economy by measuring all goods and services produced. Its biggest component is consumer spending, which accounts for about 70% of GDP. First-quarter spending increased 2.2%, after dropping 4.3% in the fourth quarter.

Hopefully, a good portion of this increase in consumer spending was in the lawn and garden category. As you probably saw in the Making Cents sales poll, 46% indicated that March sales were higher than same-month sales in 2008, 4% indicated they were the same level, and 50% indicated fewer March sales than last year. This is consistent with my conversations across the country as well.

Be sure to complete the April poll on the right side of the page.

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3 Responses to Consumer spending rebounds

  1. Waseem says:

    Indeed it is a bleak time for plepoe dealing in sales. But on the other hand, it is actually getting harder to keep up expenditure to its previous high amounts. This is due to the unstable nature of the economy and the decreasing income in the world. Due to volatility, workers are now more willing to accept pay cuts in the face of recession than to face a widespread retrenchment. Like the recent layoff by the Bank of America, it was inevitable as bankers are high earners and in the face of such uncertainty and slow moving cash, banks cannot afford to keep up the high pay given to their employees. Lay-offs will become more common if the economy does not pick up and this will further cause expenditure to fall.

  2. I do not know whether it’s just me or if perhaps everyone else experiencing issues with your site. It seems like some of the written text within your content are running off the screen. Can somebody else please comment and let me know if this is happening to them as well? This could be a issue with my internet browser because I’ve had this happen before. Kudos

  3. these things I have never understood. I barely understand my own echonomy, understading the world echonomy is faar out of my league.. 🙂

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