WASHINGTON (CN) – The gross domestic product grew 3.2 percent in the first quarter of this year, according to early estimates released Friday by the Commerce Department. “The economy that was losing jobs a year ago is creating jobs today,” President Obama said, adding that the country’s “economic heartbeat is growing stronger.”
The positive quarter is the third consecutive quarter of economic growth, and stands in stark contrast to the first quarter of 2009, in which the economy shrank at a rate of 6.5 percent. The GDP grew by 5.6 percent in the last quarter of 2009 and by 2.2 percent in the previous quarter.
“With a third straight quarter of growth, it’s clear America’s economy is turning around,” Commerce Secretary Gary Locke said in a statement.
The number was bolstered by “a strong pickup in consumer spending,” the Commerce Department said. Consumer spending, a huge driver of economic recovery, grew by 3.6 percent in the first three months of 2010. By contrast, spending only grew by 1.6 percent at the end of last year.
But the increase in consumer spending is not being supported by a parallel growth in job creation. The unemployment rate still remains stubbornly high at around 10 percent. The economy added 162,000 jobs in March, but nearly 50,000 were temporary hires for the 2010 Census.
Obama acknowledged the discrepancy. “While today’s GDP report is an important milepost on our road to recovery, it doesn’t mean much to an American who has lost his or her job and can’t find another,” he said. “For millions of Americans … ‘you’re hired’ is the only economic news they’re waiting to hear.”
Locke agreed. “Americans remain rightly focused on their personal financial situations and jobs,” he said.
“Given the severity and depth of the recession, it will take a number of quarters of robust growth and strong employment gains to return the economy to full health and full employment,” said Christina Romer, chair of the Council of Economic Advisers.
For those with jobs, personal income levels increased by a rate of 3.9 percent in the first quarter.
Romer noted that the real estate investment market fell in the first quarter, as did state and local government spending, consistent with widespread budget shortfalls at the local and state levels.