Final Q1 GDP Growth Rate at 1% Thanks to Exports

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The BEA reported that the final U.S. GDP growth for Q1 2008 was revised upwards to 1%, from the Q4 2007 GDP growth rate of .6%. The increase was due to slightly higher exports, a result of the declining dollar.

Economic growth plummeted from 4.9% in Q3, and 3.9% in Q2 2007. The total GDP for 2007 was 2.2%, down from the 2006 growth rate of 2.9%. The decline in growth has been due to the housing market slowdown and related weak consumer spending. (Source: GDP News Release)

The last time GDP was this low was in Q1 2003, the tail-end of the last recession. A healthy growth rate is about 2-3%. For a review of the most recent GDP reports, see GDP Current Statistics.

What It Means to You

GDP growth at 1% isn't great, but we'll take all the positive news we can get. The slight uptick means that the economy, though painfully slow, is not hovering at the brink of a recession, which is two quarters of negative GDP growth. Second quarter growth will probably also not turn negative, since that is when taxpayers began receiving checks from the Economic Stimulus Package. Stay tuned until Friday, when the Employment Report is released.

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