Economy grows by only 0.6 percent in first quarter

[Midnight Mike]

Love the headline, it is almost as if the media is disappointed that the country did not post a loss :wink: Since the media has been talking about a recession since last year.

http://biz.yahoo.com/ap/080430/economy.html?.v=4

Economy limps ahead at a 0.6 percent pace in first quarter, better pace than expected

WASHINGTON (AP) -- The bruised economy limped through the first quarter of this year at only 0.6 percent as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.

[T-Bird76]

While this isn't fantastic it is certainly good news and hopefully we'll see the economy grow as we move into the summer months. Airlines and hotels are reporting very strong pre summer bookings so hopefully we'll begin to see a turn around soon. Even the stock market seems to be stabilizing; we're not seeing these huge dips and spikes like we did two months ago. Now if the dollar would regain some strength.

[Midnight Mike]

While this isn't fantastic it is certainly good news and hopefully we'll see the economy grow as we move into the summer months. Airlines and hotels are reporting very strong pre summer bookings so hopefully we'll begin to see a turn around soon. Even the stock market seems to be stabilizing; we're not seeing these huge dips and spikes like we did two months ago. Now if the dollar would regain some strength.

As long as the Feds keep cutting interest rates, the dollar will not strengthen very much & of course, the Feds can't cut interest rates until the economy gains a little steam & the problem with the home loans passes.

Another problem that we are going to have to address is the amount of money being spent of social programs (Welfare, Social Security, Medicare/Mediaid, etc)

[Matt Molnar]

The dollar is actually up a bit over the past couple days based on speculation that today's expected Fed rate cut will be the last for awhile.

[Midnight Mike]

The dollar is actually up a bit over the past couple days based on speculation that today's expected Fed rate cut will be the last for awhile.

Exactly :wink: , dollar will start to strengthen when interest rates start going back up.....

[bonanzabucks]

Well, compared to last summer when the economy grew by 3-4%, 0.6% is nothing to run home about. It's still pretty bad, though better than what I thought it would be. Of course, if gas was a lot more affordable, we would be having a lot more growth even with the housing crisis as bad as it is. High energy costs are what's keeping things as bad as they are.

The price of oil will be key. If it continues to go up, this 0.6% will more likely become negative. The American economy cannot withstand really high energy prices for a sustained period of time, especially since our economic success was largely helped by cheap transport costs compared to the rest of the world.