U.S. Economy Slumping, But Slower

The United States’ economic recession showed little progress during the first quarter of this year, with many businesses having to cut back on spending and stocks, which also influenced the GDP, stated by the Commerce Department to have decreased at an annual rate of 6.1% from January through March.

Although inflation was good, this decrease of the GDP was larger than both Wall Street and economist’s expectations, as it has fallen three consecutive quarters—something that hasn’t occurred in over 30 years. The housing slum, which reported a 38% decline, in addition to a shrinking GDP and a tremendous goods adjustment combined and gave the economy a good slap.

But the news isn’t all bad. Although exports dropped 30%, imports plummeted nearly 5% more, giving room for an improvement in trade. Consumer’s showed an interest in durable goods, as it rose 9.4% in January through March after the 22.1% drop during the fourth quarter of ‘08, as well as non-durables, which increased 1.3%.

Overall, the economy is starting to recover. Spending has nearly a 6% difference between fourth-quarter 2008 and first-quarter 2009, and the GDP index shot up from a 0.5% increase to 2.9% increase during the past six months. Although over $100 billion were dumped through inventories, it brought businesses balance in buying and selling goods, slowing the production plummet.

But consumers shouldn’t just wait it out. Governments can’t be expected to do everything. When citizens receive stimulus money, spend it where the economy needs it the most. It is important to remember that governments are nothing without the support of their people.

Original article: Wall Street Journal, April 29, 2009