U.S. GDP for Q1 increased, but more slowly than for the same period a year ago. It’s the 11th consecutive quarter of expansion. The American economy grew 2.2% from January to March, compared to a 3% increase last year.
Government spending was down and so was business investment, which trailed-off at an annualized rate of 2.1%.
Consumer spending was up and so is sentiment. The University of Michigan’s Index put April’s final figure at its highest level in a year – 76.4, up from 76.2 in March. An easing of gasoline prices and ongoing optimism about employment get the credit. However, yesterday’s very modest decline in initial jobless claims (down just 1,000) is held up as another sign the U.S. recovery is weakening.
And a couple of downgrades have sent ripples through the bond market. Both the province of Ontario and Spain have had their ratings cut. Ontario’s yields increased as, mainly, foreign investors cashed-in their holdings. Spain’s rating was cut back two notches yesterday. Today the government revealed that unemployment hit 24.4% in Q1.
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