Consumer Spending Boosts GDPby Tim Manni
Numerous factors, including an increase in consumer spending, helped boost the Gross Domestic Product (GDP) by an annualized rate of 1.9% in the second quarter of 2008. Being the recession indicator that it is, the GDP’s increase is a positive sign for the economy, but the number is less than the 2.4% increase economists predicted. There has been a steady incline in the GDP since the fourth quarter of 2007, when growth contracted by 0.2%.
The 1.9% annualized increase in Personal Consumption Expenditures (PCE) in 2008’s second quarter, along with a stronger growth in exports, and a stark decline in imports, helped goose the GDP’s positive numbers.
There’s no doubt that stimulus checks had something to do with the consumption increase. We will continue to keep our eye on the third quarter’s GDP numbers – many experts are worried that stimulus checks haven’t made the impact our government hoped they would.