This morning the Bureau of Economic Analysis, part of the U.S. Department of Commerce, released an advanced estimate for GDP growth in the first quarter of 2011. According to the release, GDP growth in Q1 2011 was 1.8 percent, down from 3.1 percent in Q4 2010.
Although the economic recovery was by no means on fast forward, it had been improving at a slow yet steady pace over the past year. This decline is likely the result of several factors including higher gas prices, inflation and the weak housing market.
In this morning’s press release, Commerce Secretary Gary Locke commented on the growth in employment during the same time period.
“From December to March, we saw the fastest pace of private employment growth so far in this recovery. While we work to make tough choices to ensure government is living within its means, we must continue to invest in our future – in what will make us more competitive in the global marketplace and strengthen the foundation of our economy – so opportunities for the American people continue to grow.” Source: Commerce Department
Unfortunately, April’s unemployment figures are already looking rough. For the third week in a row, first-time unemployment claims topped the 400,000 mark. Last week, there were 429,000 initial jobless claims filed, an increase of 25,000 in just one week. Not only was this a big jump from the prior week, it was highest number of initial claims in three months.
The increase also affected two figures that are used to gain a better understanding of the unemployment situation in general — the four-week and eight-week moving averages. After last week’s results, the four-week moving average of initial filings was 408,500 and the eight-week average topped 400,000 again.
I’m not an economist but my guess is that these figures don’t bode well for the official April 2011 employment situation summary due out next week.