Behind that great GDP number, the real economy slumped

The economy isn’t doing nearly as well as that 3.2% annual growth rate for gross domestic product reported Friday by the Commerce Department.

‘The underlying trend of consumption and investment is weakening.’ Jason Furman, Harvard University “First-quarter GDP is 3.2%, but the underlying data is much weaker and is consistent with a slowing economy,” said Jason Furman, former economic adviser for President Obama and a professor at Harvard University.

Consumer spending rose only 1.2% in the first quarter, after healthy 2.5% growth the previous quarter. Spending on durable goods plunged 5.3%, the worst since 2009. Economists are projecting higher spending and investment in the current quarter, however. Retail sales and capital investment perked up in March, establishing stronger momentum for the second quarter.

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