Consumer Spending Was Lower Than Initially Reported, However
The US economy grew at a “slightly faster” pace in the first quarter than had been estimated, the AP cites revised Commerce Department data as showing. GDP expanded at an annualized rate of 1.1% over the first three months of the year, the story says. Also Tuesday, the Commerce Department revised down its estimate on consumer spending, to 1.5% from its initial figure of 1.9%, the smallest quarterly gain in two years. This was a reflection of “weak spending on services such as transportation and recreation,” according to Reuters. However, April and May retail-sales reports indicate that there has been an uptick in consumer spending over the second quarter. According to Bloomberg News, “improved performance in trade and business investment more than made up for” the slower consumer spending seen during Q1.
Overall, analysis of the latest Commerce Department data further indicates the murky future of the US economy. The Wall Street Journal says that despite the first-quarter expansion, the economy still appears vulnerable to global uncertainties. The Washington Post, however, takes a more optimistic view, citing signs that the economy is “accelerating,” with job gains and low borrowing costs “helping propel household demand.”
What This Means For Small Businesses
Though an upward revision of US GDP growth suggests that there could be some broad improvements to the US economy in general, the economic picture remains sluggish and uncertain. This uncertainty has been a drag on small business growth since the recession. As NFIB Chief Economist Bill Dunkelberg said in the latest Small Business Economic Trends report, “The bottom line is that without an empowered small business sector, the economy will grow at a mediocre pace,” noting “we should expect the same slow growth for the rest of the year.”
The Business Journals also reports on the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.