US Economy Exceeds Growth Expectations For First Quarter of 2008

Though the economy seems to be sliding ever closer to a recession, current numbers released by the US Department of Commerce do not yet confirm it. The economy outperformed estimates and grew at a rate of 0.6 percent for the first quarter of 2008, and has not yet shown a decline in growth for two consecutive quarters, the textbook definition of a recession.

Spending by households also grew at its slowest pace since 2001, when the US economy actually was in the midst of a recession. This prompted the Federal Reserve to cut interest rates yet again, its fourth consecutive rate cut for 2008.

Though consumer spending, often described as the engine of the economy, grew at a paltry one percent during the first quarter of 2008, some reports had inflation slowing and the job market adding 7,000 more jobs in April 2008 than in March 2008. This odd combination of slightly positive news and economic trepidation has many Americans and economists cautiously optimistic about America’s economic performance for the second half of 2008.