Economic growth slowed to a crawl in the first three months of the year as a spike in gasoline, higher overall inflation and continued weakness in the housing market all took a toll on the recovery.Gross domestic product, the broadest measure of the nation's economic health, rose at an annual rate of 1.8%, the Commerce Department reported Thursday. That's a significant slowdown from the 3.1% growth rate in the final quarter of 2010.
Most predictions for growth have fallen precipitously over the past several weeks as rising prices spooked forecasters. Economists surveyed by CNNMoney were predicting growth of 2.0% in the first quarter. But some estimates were as high as 4.3% just two months earlier.
"Undoubtedly, consumers are cutting discretionary spending to compensate for rising food and energy prices," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors. "The risk of recession in the near-term remains slim, but an extended period of slow growth isn't likely to encourage an enthusiastic mood any time soon." (read more)
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