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April 26, 2013

Consumer spending, inventory helped GDP

April 29, 2013 – The first quarter of 2013 saw "the strongest consumer spending growth in two years," NAFCU Chief Economist and Director of Research David Carrier said Friday in response to data on first-quarter growth in gross domestic product.

The NAFCU economist said the first quarter was marked by large increases in consumer spending and inventory accumulation.

Carrier provided his views in a Macro Data Flash based on data from the Bureau of Economic Analysis. The bureau reported the U.S. economy expanded by 2.5 percent in the first quarter of the year. Government spending decreased by 4.1 percent. Consumer spending increased by 3.2 percent. Residential investment increased by 12.6 percent, while nonresidential investment went up 2.1 percent.

Carrier said that government spending cuts from sequestrationand a drawdown in defense spending would be a drag on the economy for the next few months. However, he added, "On a positive note, the recovering housing market is expected to continue to spur GDP growth throughout the year and into 2014."