Bush keeps telling us that the economy is strong, but why would we believe anything he says? The latest economic growth numbers aren't good:
Weaker exports and a steady slide in spending on homebuilding helped slow U.S. economic growth to its softest pace in four years during the first quarter, the Commerce Department reported on Friday.It doesn't sound encouraging. To figure out what this really means, I turned to Bonddad who explains:
Gross domestic product or GDP, which measures total goods and services output within U.S. borders, increased at a weaker-than-expected 1.3 percent annual rate in the three months from January through March.
That was a little more than half the fourth quarter's 2.5 percent rate and well below the 1.8 percent rate that Wall Street analysts had forecast GDP would expand. The last quarter when growth was weaker was in the first three months of 2003, when GDP expanded at a 1.2 percent rate.
Growth has been slowing since late last year under the impact of a hard-hit housing sector where rising defaults are taking a toll on the subprime lending sector and causing builders to scale back until inventories of completed but unsold homes are reduced.
This report is terrible. Growth slowed more than forecast and inflation increased more than expected and well beyond the Fed's comfort zone.
