Seasonally Adjusted Annual Rate
The economy grew at a disappointing 1.8 percent annualized rate in the first quarter according to the advance estimate of gross domestic product from the Bureau of Economic Analysis. Consumer spending made the biggest contribution, adding 1.9 percentage points, although this was below the 2.8-point contribution made by consumers in the fourth quarter. Inventory additions and business spending on equipment and software also contributed to growth. Subtracting from growth were business investment in structures and homebuilding -- which were affected by inclement weather -- as well as net exports and government outlays. Late last year, many economists raised their GDP forecasts in response to the $858 billion package of tax cut extensions and new tax cuts passed by Congress in December. But recently many have lowered their forecasts due to rising energy prices and the uncertain outlook for the Middle East, Japan and the eurozone. The Employment Situation report, which the Bureau of Labor Statistics will release this Friday, will be even more important than usual because it will reveal whether the drags on economic growth are spilling into the labor market, which is a major driver of demand for commercial real estate.