Disappointing First Quarter GDP Growth

Good times just around the corner?:

U.S. Economy Slows: Gross domestic product, the value of all the goods and services produced, rose at an seasonally adjusted annual rate of 1.8% in the first quarter, the Commerce Department said Thursday in its first estimate of the economy's benchmark indicator.

The modest increase marked a significant slowdown from the economy's pace in the fourth quarter, when GDP rose by 3.1%. ...The data marked a setback for an economy still healing from a deep recession...

And, continuing a recent trend, inititial claims for unemployment insurance also increased to a level that, historically, is associated with job loss.

Brad DeLong also notes this passage from the FT:

Gross domestic product growth was also slowed by a “sharp upturn” in imports, falling exports and a steeper decline in government spending. Federal government spending sank 7.9 per cent, much faster than the 0.3 per cent decline recorded in the fourth quarter and local and state government spending fell 3.3 per cent, compared with a 2.6 per cent drop in the last three months of 2010. The pullback in government spending, particularly at the state and local level, “reflects the ongoing budget problems that will continue to be a drag on the overall economy for some time yet”, Mr Ashworth said...

And he comments:

Contractionary fiscal policy is contractionary.

Yep.

[See also: Econbrowser, Free Exchange, Ezra Klein, Calculated Risk, Twenty Cent Paradigms.]