The BEA lowered its estimate of economic growth in the first quarter (January - March) 2010 even further than it did last month. The first estimate (in April) was 3.2%, then 3.0% (in May) and now 2.7%. Although down quite a bit from the 5.6% growth rate for fourth quarter 2009, it's still a healthy trend.
The slight revision was because more data came in. This showed exports were up, and shopping was down, more than originally expected. This is a normal part of the business cycle for an economy coming out of a recession. (Source: Bureau of Economic Analysis, Q1 GDP Report)
This biggest driver of growth was still an increase in personal consumption. People are getting sick of sitting at home and doing without. They started to go out to eat again (contributed .17 points, after being down for the last five quarters). They are also buying shoes and clothes (contributing .27 points, after being down for five quarters).
They are buying furniture (contributing .25 points) and, of all things, recreational vehicles (adding .30 points). Vacation must be on shoppers' minds, because they are also spending on hotels (bringing .26 points to the table).
What It Means to You
A 2.7% growth rate means the economy is definitely out of recession. Recessions are usually defined by two consecutive quarters of negative GDP growth.
Unemployment will continue to hover between 9-10%, however, since growth needs to be more than 3% for businesses to add jobs. For a history of all GDP reports since 2007, see GDP Current Statistics.
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