Thursday, April 28, 2011


Economic growth slows as inflation surges

WASHINGTON (Reuters) – Economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in 2-1/2 years.
Another report on Thursday showed a surprise jump in the number of Americans claiming unemployment benefits last week, which could cast a shadow on expectations for a significant pick-up in output in the second quarter.
Growth in gross domestic product slowed to a 1.8 percent annual rate after a 3.1 percent fourth-quarter pace, the Commerce Department said. Economists had expected a 2 percent pace.
With much of the pull back traced back to sharp cuts in defense spending and harsh winter weather, analysts were hopeful the economy would regain speed in the second quarter. The drop in defense spending was seen as temporary.
"Growth was disappointing given the momentum of the economy heading into the year. We are still of the belief that the economy will improve out of the soft patch through this quarter into the second half of the year," said Brian Levitt, an economist at OppenheimerFunds in New York.

Most Americans say U.S. in recession despite data: poll

9:47am EDT
By David Morgan
WASHINGTON (Reuters) - More than half of Americans say the U.S. economy is in a recession or a depression despite official data that show a moderate recovery, according to a poll released on Thursday.
The April 20-23 Gallup survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. Twenty-nine percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is "slowing down," Gallup said.
The poll findings have a 4 percentage point margin of error, according to Gallup.
The health of the U.S. economy is expected to be a major issue as President Barack Obama, a Democrat, seeks re-election in 2012.
The government reported on Thursday that U.S. economic growth slowed more than expected to 1.8 percent in the first quarter of the year, as soaring food and gasoline prices drained consumer spending power.
A slowdown in first-quarter growth was acknowledged on Wednesday by the Federal Reserve, which described the U.S. economic recovery as proceeding at a "moderate pace." That was a step back from the "firmer footing" that Fed officials cited for the recovery in March.
The Gallup poll found that Democrats are the most likely to say the economy is growing. Forty-three percent of Democrats said the economy is in a recession or depression, 13 percent said it is slowing down and 42 percent said it is growing.
Sixty-eight percent of Republicans and supporters of the conservative Tea Party movement said the economy is in a recession or a depression. Fourteen percent of Republicans and 13 percent of Tea Party supporters said the economy is growing.
Fifty-seven percent of independent voters -- a crucial segment of the electorate for Obama's re-election bid -- said the economy is in a recession or depression and 24 percent said it is growing.


Silver hits record near $50, first time since 1980

On Thursday April 28, 2011, 12:50 pm EDT
By Frank Tang
NEW YORK (Reuters) - Silver soared to an all-time high on Thursday and gold rose to another record, as a falling dollar and signs that the Federal Reserve would maintain a loose monetary policy boosted precious metals' appeal as a hedge against inflation and economic uncertainty.
Silver briefly climbed to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Hebert and Nelson Bunker Hunt sought to corner the silver market three decades ago. The metal later pulled back on technical selling.
"Yesterday's speech from the Fed was an acknowledgment of the continuing of the strategy by the Fed and Washington ... to monetize our debt, and basically to devalue the dollar," said Robert Lutts, chief investment officer of Cabot Money Management, which oversees more than $500 million in client assets.
"The metal markets are recognizing that and it is being priced in. What monetization means is that, down the road, we will have more inflation," he said.

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