The US Economy: First quarter growth was the weakest in 4 years at just .015% for Q1. Comparing this to 5.6% growth of Q1 2006 even extreme optimists must acknowledge that the economy was slowing significantly heading into the second quarter.
A jump in consumer spending last quarter was one of the few things that kept the expansion alive. The increase in spending, which accounts for about 70 percent of the economy, was revised up to an annual rate of 4.4 percent, the biggest gain in a year, from an initial estimate of 3.8 percent.
Comment: the sub-prime crunch bubbled to the fore late in Q1 in March 2007. How long can we expect the consumer to pull the economic cart with tighter lending standards, higher interest rates, falling home prices, and rising gas costs in Q2?
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