The stumble in first-quarter US gross domestic product makes more noise than news. Headline growth of 0.1 per cent looks feeble, and bad weather wasn't the only cause, according to a report released on Wednesday by the Bureau of Economic Analysis. A dip was due after a strongish fourth quarter, however, and growth over the previous year's first three months came in at a presentable 2.3 per cent.
The quarterly performance was far below the Thomson Reuters consensus estimate of 1.2 per cent. Yet, near-record snowfall and cold temperatures over much of the United States didn't deter consumers from spending: Real personal consumption expenditures increased at an annualized three per cent rate.
With the Affordable Care Act kicking in, health care expenditures jumped an annualized 10.5 per cent, though it's not clear how much of that reflected higher costs and how much coverage of the previously uninsured.
The picture was less rosy on the production side, with residential and non-residential fixed investment declining and the buildup of inventories slowing sharply.
Together, they subtracted one percentage point from GDP growth. Government spending was almost flat, and weak net exports cut growth 0.8 percentage point. The savings rate also ticked down, making an early pickup in investment unlikely and prospects for retiring baby boomers even more uncertain.
The quarterly performance was far below the Thomson Reuters consensus estimate of 1.2 per cent. Yet, near-record snowfall and cold temperatures over much of the United States didn't deter consumers from spending: Real personal consumption expenditures increased at an annualized three per cent rate.
With the Affordable Care Act kicking in, health care expenditures jumped an annualized 10.5 per cent, though it's not clear how much of that reflected higher costs and how much coverage of the previously uninsured.
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Together, they subtracted one percentage point from GDP growth. Government spending was almost flat, and weak net exports cut growth 0.8 percentage point. The savings rate also ticked down, making an early pickup in investment unlikely and prospects for retiring baby boomers even more uncertain.