http://money.cnn.com/2013/03/28/news/economy/gdp-report/index.html?iid=SF_E_River
This article talks about how U.S GDP rose more than expected this past quarter. It suggested that this can be explained by construction activity becoming stronger, investment in non-residential builings climbing at an annual rate of 16.7%, which is about three times the growth estimate from before, and an increase in exports.
However, the government reduced spending on defense and businesses apprehensive about the fiscal cliff cut back, making inventories smaller. This alone prevented GDP from growing an additional 3%. Other factors of course compensated for this and growth in the first quarter of 2013 is forecasted to be even stronger.
As stated at the end of the article though, the question that remains is how long will this increased growth last? The government will be cutting its spending this month, which is predicted to reduce growth by 0.6% and cost the country up to 750,000 jobs.
Stated at the end of the article, "Federal Reserve Chairman Ben Bernanke has warned that the cuts will be a "significant" burden to the economy."
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ReplyDeleteThough growth figures are great but I think it is too soon to cut spending, the economy is still growing out of a recession and slowing down this growth is not a good idea. The main improvement is the improvement from the last quarter of 2012. I think the lost of 750,000 jobs is a huge number and a reduction of 0.6% in growth rate is a direction the economy shouldn't be heading at all.
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