The
Bureau of Economic Analysis (BEA) released its “advance” estimate of 1.3%
annualized growth in the inflation-adjusted (“real”) gross domestic product
(GDP) for the 1^st quarter (href="http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp107a.pdf"
title="http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp107a.pdf">title="http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp107a.pdf">http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp107a.pdf). 
Real GDP grew at a 2.5% in the 4^th quarter of last year. 

Highlights
of today’s GDP report:

style='font-size:10.0pt;font-family:Wingdings;mso-fareast-font-family:Wingdings;
mso-bidi-font-family:Wingdings'>Østyle='font:7.0pt "Times New Roman"'>       style='font-size:10.0pt;font-family:Arial'>The deceleration in growth relative
to the 4^th quarter primarily reflected a 1.2% decline in exports, a
2.3% rise in imports, slightly slower consumer spending growth (3.8% in the 1^st
quarter vs. 4.2% in the 4^th quarter), and a 3.0% decline in federal
government spending.

style='font-size:10.0pt;font-family:Wingdings;mso-fareast-font-family:Wingdings;
mso-bidi-font-family:Wingdings'>Østyle='font:7.0pt "Times New Roman"'>       style='font-size:10.0pt;font-family:Arial'>Non-residential business investment
increased 2.0% in the 1^st quarter, in contrast to a decrease of 3.1%
decline in the 4^th quarter.

style='font-size:10.0pt;font-family:Wingdings;mso-fareast-font-family:Wingdings;
mso-bidi-font-family:Wingdings'>Østyle='font:7.0pt "Times New Roman"'>       style='font-size:10.0pt;font-family:Arial'>Residential investment declined
17.0% in the 1^st quarter, following a decrease of 19.8% in the 4^th
quarter.  Residential investment has declined for six consecutive
quarters.

style='font-size:10.0pt;font-family:Wingdings;mso-fareast-font-family:Wingdings;
mso-bidi-font-family:Wingdings'>Østyle='font:7.0pt "Times New Roman"'>       style='font-size:10.0pt;font-family:Arial'>Annualized inflation in the “core”
personal consumption expenditures (PCE) price index, which excludes volatile
energy and food prices, was 2.2% in the 1^st quarter, up from 1.8% in
the 4^th quarter.  The core PCE is one of the Fed’s preferred
measures of consumer price inflation.

Ø      
Real
GDP growth has averaged 3.35% since enactment of tax relief in 2003 and 2.53%
since the beginning of 2001.  Over the past four quarters, growth has
averaged a below-trend 2.07%, partly reflecting continued adjustments in the
housing sector.

 

Jeffrey Wrasestyle='color:blue'>

Chief Economist,
Senate Republicans

Joint Economic
Committee

H-805 w:st="on">Hart Senate
Office Buildingstyle='color:black'>

(202) 224-2335style='color:black'>

href="mailto:jeff_wrase@jec.senate.gov" title="mailto:jeff_wrase@jec.senate.gov">jeff_wrase@jec.senate.gov