Dismal economic growth.
It's hard to be upbeat about that but since it occurred during a Democrat administration, Reuters does its best to accentuate whatever positive it can find in its report. First the downbeat news as relayed by Reuters reporter Lucia Mutikani:
WASHINGTON (Reuters) – Economic growth slowed more than expected in the first quarter as higher food and gasoline prices dampened consumer spending, and sent a broad measure of inflation rising at its fastest pace in 2-1/2 years.
And now the first of several Reuters exercises in excuse making:
But the pull back in output, which was also the result of harsh winter weather, a widening trade gap as well as weak government spending, will probably be fleeting given a firming labor market.
Gee! I wonder if Reuters would have used that "fleeting" excuse had this economic growth slowdown happened during the Bush administration? Also note how Reuters blames less government spending as an excuse for a poor economy.
Here are the unavoidable economic stats in the report:
Growth in U.S. gross domestic product -- a measure of all goods and services produced within U.S. borders -- braked to a 1.8 percent annual rate after a 3.1 percent fourth quarter pace, the Commerce Department said on Thursday. Economists had expected a 2 percent growth pace.
Not good but Reuters manages to find a positive quote:
"We hit a bit of a soft patch in the first quarter, but that should prove temporary because weather was a drag and we got blindsided a bit by a jump in gasoline prices late in the quarter," said Ryan Sweet, a senior economist at Moody's Analytics before the report was released.
So gasoline prices are supposed to decline giving way to better economic growth? Lean back, close your eyes, tap your heels together three times, and wish for economic growth, Dorothy.
Even with the Reuters positive spin, it was hard to miss the fact that the economic outlook remains dismal:
The Federal Reserve on Wednesday acknowledged the slowdown in first-quarter growth, describing the recovery as proceeding at a "moderate pace" -- a slight step back from a statement in March when it said the economy was on a "firmer footing."
It trimmed its growth estimate for 2011 to between 3.1 and 3.3 percent from a 3.4 to 3.9 percent January projection.
...Growth in the first quarter was curtailed by a sharp pull back in consumer spending, which expanded at a rate of 2.7 percent after a strong 4 percent gain in the final three months of 2010.
Rising commodity prices meant the households that drive about 70 percent of U.S. economic activity had less money to spend on other items. The report also underscored the pain that strong food and gasoline prices are inflicting on households.
A broader measure of inflation, the personal consumption expenditures price index, rose at a 3.8 percent rate -- its fastest pace since the third quarter of 2008 -- after increasing 1.7 percent in the fourth quarter.
However, not to worry. The Reuters reporter does her best to somehow look for a silver lining amidst the economic gloom in the form of more wishful thinking about gasoline prices:
Still, economists expect consumer spending to trend higher in the second quarter, mostly on the belief gasoline prices will not rise much above $4 a gallon on average.
And what will keep gasoline prices from rising much more? According to Reuters it is based on "belief." In any event, it will be entertaining to read future Reuters spin reports if the economy does not act as "expected."