GDP Growth Stalls in The U.S., Unemployment Claims Rise Well Above Minimum For Sustainable Growth

The BEA has just released GDP numbers for Q1 of 2011. The numbers are not good. In adidtion, unemployment claims rose well above what is considered a minimum for sustainable growth (see at the bottom )

BEA: "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.8 percent in the first quarter of 2011, (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 3.1 percent.

The GDP estimates released today are based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was also 1.8 percent (see "Revisions" on page 3).

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased".

Also:

"The deceleration in real GDP in the first quarter primarily reflected a sharp upturn in imports, a  deceleration in PCE, a larger decrease in federal government spending, and a deceleration in  nonresidential fixed investment that were partly offset by a sharp upturn in private inventory investment."

And an interesting note on financial corporations:

"Domestic profits of financial corporations decreased $70.6 billion in the first quarter, in contrast  to an increase of $57.7 billion in the fourth. Domestic profits of nonfinancial corporations increased  $45.8 billion in the first quarter, in contrast to a decrease of $10.1 billion in the fourth. "

Unemployment:

The Labor Department has just announced that claims rose by 10,000 to a seasonally adjusted 424,000.
"Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession." (Yahoo/AP)