Down from 3% in Q4 of 2011
The U.S. economy expanded at an annualized rate of 2.2 percent in the first quarter, a slower pace than expected, keeping the recovery on track but failing to generate enough activity to knock down the jobless rate significantly.
This first estimate will be revised later, but economists in various surveys had expected gross domestic product growth – the output of all goods and services, from cars to electricity to manicures — at 2.5 percent to 3.2 percent annualized.
“In reviewing the numbers, the fear now is that we may be running out of runway before the onset of another recession. We will not be surprised to see continued growth in GDP given the fact that privately held companies continue to grow at a healthy rate,” said Brian Hamilton, CEO of Sageworks. “However, what is becoming slightly concerning is that the unemployment rate is not decreasing at a fast enough rate. ”
GDP growth was 3 percent in the final three months of 2011. Much of the growth in the October-December quarter was due to businesses aggressively restocking their supplies. The pace of restocking is expected to have declined last quarter.