27 April 2012 21:46 [Source: ICIS news]
WASHINGTON (ICIS)--The ?xml:namespace>
The Department of Commerce reported earlier on Friday that US gross domestic product (GDP) in the quarter ended 31 March grew at an annualised pace of 2.2%, less than the upwardly revised 3% growth rate recorded in the fourth quarter of 2011.
That GDP growth pace was lower than the 2.6% or 2.8% expansion that many economists had been expecting and indicated that the US recovery was cooling.
In normal economic times, the American economy would be expected to grow at what economists call a trend pace of 3-3.5%.
In 2010, the first full year following the end of the
The first quarter 2012 GDP report, along with other recent economic data, “all seem to suggest a loss of momentum in the recovery,” said American Chemistry Council (ACC) chief economist Kevin Swift in a note to council member firms.
“Consumer confidence slipped as consumers’ short-term expectations dampened on continued labour market weakness and higher gasoline prices,” the ACC economic trends note said.
The 2.2% GDP growth pace in the first quarter was attributed largely to a bump in consumer spending, in part offset by declines in federal and state government budgets, weakening commercial property development and increased imports.
But that gain in consumer spending might not continue, Swift’s note indicated.
“Following a boost of consumer spending during the first quarter, consumers reported they were less likely to purchase autos or appliances over the next six months,” Swift said.
On the housing front, said Swift, referring to another major chemicals industry consumer sector, “despite greater affordability and historically low mortgage rates, new home sales slid” in March, as did existing home sales, new home construction and home builder confidence.
“The report on first quarter GDP was weaker than expected,” Swift noted.
Other than the gain in consumer spending, which accounted for most of the quarter’s modest improvement, “durable goods orders slipped on weaker investment in capital goods, in addition to sharply lower aircraft orders”.
“These indicators all point to slower growth than in previous months,” Swift added.
In addition to slowing growth in the
Further economic declines in the EU would have knock-on effect in the
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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