Spending and Exports Increase GDPby Tim Manni
The US economy improved slightly in the first quarter of 2008, according to a report released today by the Commerce Department. The Gross Domestic Product (GDP), a gauge of goods and services produced in the US, rose by one percent. Larger growth in consumer spending and exports spurred the GDP past initial estimates of a 0.6% gain.
The weak dollar has expanded US exports, keeping export prices low, and remains one of the last sectors supporting the struggling economy. Meanwhile, imports have decreased 0.7%. Retail sales more than doubled original forecasts in May thanks to billions of dollars doled out in stimulus checks.
The GDP’s price index, a closely monitored measurement of inflation, rose at a rate of 3.6%. The “core” price index, which excludes food and energy costs, rose by 2.3%. In a statement released yesterday’s by the Fed after the Federal Open Market Committee (FOMC) meeting, the central bank said they expect “inflation to moderate later this year and next year.”