The economy roared to a 4.8% growth rate in the first quarter of 2006:
April 28, 2006 — The Commerce Department’s Bureau of Economic Analysis says that the U.S. economy saw a big bump in activity during the first three months of the year — the biggest in more than two years.
The report out this morning shows that the U.S. gross domestic product grew at an annual pace of 4.8 percent between January and March. That’s the best performance since the middle of 2003 and is well above the disappointing performance seen in the fourth fiscal quarter of 2005 — just 1.7 percent growth. Economists had been expecting growth around 5 percent…
…Today’s release has some interesting numbers showing that consumer spending (+5.5 percent), business investment (+16.4 percent) and government spending (+10.8 percent) helped goose growth upward between January and March. Increases in U.S. exports (+12.1 percent) also helped move things along.
The high GDP number seems to indicate that businesses are finally beginning to spend their record profits. Since the 2001 recession, business has been hesitant to invest. Today’s report shows that businesses are beginning to pick up some of the slack as consumers slow their spending growth.
This is very big news that got lost amid the talk about immigration and oil and gas prices. Even with all the “pain at the pump” that the media and the Dems have been enthusiastically discussing, the American consumer is still spending money and must feel comfortable with their financial situations.
And take a look at the 16.4% increase in business investment. That’s impressive. American businesses must be very confident that this growth will continue.