Real GDP Growth

Real GDP grew 1.3 percent (annualized) in the first quarter of 2007, according to the advance release by the Bureau of Economic Analysis. This was a substantial decline from last quarter’s 2.5 percent (annualized) growth, and the slowest pace of expansion in the U.S. economy since the first quarter of 2003. International trade was a big part of the story, as exports fell considerably, from 10.6 percent (annualized) growth in the fourth quarter of 2006 to –1.2 percent (annualized) in the first three months of this year. (That decline represents the weakest quarterly growth rate since the second quarter of 2003). Import growth compounded the issue, increasing at an annual rate of 2.3 percent after posting a decrease of 2.6 percent last quarter.