US Economy Tanks Completely in the First Quarter

 

The economy took a huge dive in the first quarter. It grew at such a slow annualized rate, 0.1 percent, that I had to enlarge my usual FRED chart just so you could see the tiny bar on the far right. The full BEA report is here.

So what happened? Consumer expenditures actually increased reasonably well. Government consumption was about flat, which isn’t too unusual these days. But fixed investment—including housing—tanked, inventories shrank, and exports plummeted. That was enough to swamp the strong gains in consumer spending.

It’s hard to draw any positive conclusions from this. Cold weather is getting some of the blame, but I always take weather-based excuses with a big grain of salt. Basically, the economy is still really sluggish. Job growth is OK but not great and wage growth is positive but only barely. Despite that, here’s what the Wall Street Journal has to say:

The latest figures come as Federal Reserve officials conclude at two-day meeting Wednesday. The numbers aren’t likely to have a large influence on policy, given the expectations for improved growth later in the year. Officials, however, are closely monitoring inflation measures. Persistently low inflation could complicate the Fed’s decisions about how to wind down its bond-buying program this year and when to raise benchmark interest rates from near zero.

Yeesh. Crappy GDP growth, sluggish job growth, and persistently low inflation “aren’t likely to have a large influence on policy.” Then what the hell would have a large influence on policy? Needless to say, a GDP report like this is music to Republican ears, so we certainly can’t expect Congress to react in any productive way. That means the Fed is all we’ve got. But apparently we don’t have them either.

 

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate