link here to article
GDP rose 1.8%, which was slightly under estimates. Personal consumption expenditures were up 2.7%, but there was a sharp rise in imports and a decline in exports so net exports were negative. There was a big drop in government spending. Federal spending was down 7.9% and state an local spending fell 3.3%.
A rise of only 1.8% in GDP means that unemployment will continue at elevated levels. Contractionary fiscal policy really is concractionary. Cuts in government spending and slower growth mean declining tax revenues. The loss in tax revenue will have an impact on budget deficits that negate cuts in spending.
No comments:
Post a Comment