Dueling Headlines

AP goes with "Economy has worst growth since 2002"

WASHINGTON - The economy nearly stalled in the first quarter with growth slowing to a pace of just 0.6 percent. That was the worst three-month showing in over four years.

But I'm tempted to go with "Economy Grows for 23 consecutive Quarters." Yeah, that's Pollyanna on steroids, but once you get past the lede, the news is not so bad:

[..] fewer people signed up for unemployment benefits last week. New filings dropped by 4,000 to 310,000. That suggests the employment climate is weathering well the economy's sluggish spell.

[...] construction spending edged up by 0.1 percent in April, down from a 0.6 percent gain in the previous month. Spending by private builders on nonresidential projects and spending by the government on big projects each climbed to all time highs in April but that strength was tempered by continued weakness in residential construction.

In the GDP report, many economists believe the first quarter will be the low point for this year. They expect growth will improve but still be sluggish.

[...] Investment in home building was cut by 15.4 percent, on an annualized basis, in the first quarter. However, that wasn't as deep a cut as the 17 percent annualized drop initally [sic] estimated. And, it wasn't as severe as the 19.8 percent annualized drop seen in the final quarter of last year.

[...] Consumers boosted their spending by a 4.4 percent growth rate in the first quarter, the most in a year. Consumer spending accounts for a major chunk of economic activity.

[...] Companies profits gained a bit of ground in the first quarter. One measure showed after tax profits rising by 1 percent, up from 0.8 percent in the fourth quarter.

Not mentioned were the record closes for the DJIA, S&P 500 and Russel2K.

Media and Blogging Posted by jk at May 31, 2007 10:31 AM