By Eric Kulisch
U.S. GDP slows to 2.2%
The U.S. economy grew 2.2 percent in the first quarter, down from the 3 percent output of goods and services in the fourth quarter, according to preliminary figures from the Commerce Department.
Personal consumption and exports were the strongest contributors to Gross Domestic Product. Exports of goods and services increased 5.4 percent in first quarter, compared with an increase of 2.7 percent in the fourth quarter.
Business inventories also added to productivity, but at a slower pace, .59 percent, than the 1.81 percent in the fourth quarter. Companies increased inventories $69.5 billion in the first quarter, following an increase of $52.2 billion in the fourth quarter and a decrease of $2 billion in the third.
Imports, which are subtracted from GDP because they substitute for domestic-made goods, increased 4.3 percent during the quarter, compared to 3.7 percent in the fourth quarter.
The figures suggest the economy is still sluggish. But the United States is actually in good shape compared to Europe, where the ongoing debt crisis has contributed to flat or negative growth in many countries. Europe's misfortune, however, is a drag on our economy because Europe is our largest trading bloc. And, the danger of bank failures in Europe that could infect the U.S. financial system still persists.
The Bureau of Economic Analysis will release a revised GDP estimate at the end of the month.
House, Senate negotiators to meet on highway bill
The conference committee named by House and Senate leaders to negotiate a compromise transportation bill will hold its first meeting on May 8, Sen. Barbara Boxer, D-Calif., announced Thursday.
Boxer is chairman of the Environment and Public Works Committee and lead author of the two-year, $109 billion transportation bill approved by the upper chamber in March.
Surface transportation programs are operating through June 30 under a three-month extension of authorizing legislation that expired in September 2009. There have been nine extensions to maintain the status quo on investment and safety programs, but the delay in producing a multi-year bill comes at a time when the Highway Trust Fund is in the red. Without new sources of revenue the Department of Transportation will require further infusions from the general treasury to support highway and transit programs.
The House recently passed another 90-day extension to permit spending through the end of the fiscal year. House Republicans would prefer a five-year, $260 billion bill they say is fully paid for and significantly reforms how programs are managed to make them more performance-based and reduce waste. The Senate's MAP-21 bill will be the starting point of negotiations, with the three-month extension a fall back option if a deal can't get done.
"I'm sure that every member of the conference, Democrat or Republican, House or Senate, understands how critical it is to swiftly pass a comprehensive transportation bill that is a deficit neutral, reform measure that will preserve or create millions of jobs and thousands of businesses," Boxer said in a prepared statement.
House Republicans have said the Senate used accounting gimmicks to overcome the shortfall in fuel tax collections and pay for the measure.
Boxer is one of 14 senators appointed to the conference committee. There are 33 House members, 14 of them Democrats, on the panel.
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