Economy Continued To Grow in First Quarter

Washington, DC, April 30, 2008--Gross Domestic Product grew an anemic 0.6 percent in the first quarter as the housing and credit markets continue to be a drag on the economy.

The economic growth during January through March was the same as in the final three months of last year, the Commerce Department said today.

It's still not clear if the economy is in a recession, but it did manage to keep from contracting last quarter.

Builders slashed spending on housing projects by 26.7 percent, on an annualized basis, the most in 27 years. That was the largest drag on the economy.

Consumers spending rose at just a 1 percent pace. That was down from a 2.3 percent growth rate and was the slowest since the second quarter of 2001, when the United States was suffering through its last recession.

Soaring energy and food prices are also cutting into people's wallets, leaving less money for discretionary items.

The credit crunch also has made it harder for people to finance homes and other major purchases like cars.

Businesses cut back spending on equipment and software at a 0.7 percent pace, the most since the final quarter of 2006. And, they cut spending on commercial construction at a 6.2 percent pace, the most since the third quarter of 2005.

However, businesses boosted their investment in building up stocks of supplies in the first quarter, adding to GDP.

Goverment spending rose at a 2 percent pace for the second quarter in a row.