Exceeding expectations by a full percentage point, the U.S. economy grew at its fastest pace in six years.
The Wall Street Journal reports that “businesses drew less from their stockrooms and stepped up purchases of equipment and software. Exports surged and consumers spent more.” However, this pace of expansion is not expected to continue, though continued growth likely is.
“It was an excellent report, but it’s not clear how sustainable this pace of growth is,” John Ryding, chief economist at RDQ Economics, told the New York Times. “We need numbers like this for the next two years, and I just don’t think we can achieve that.”
The Times continued:
Without the benefit of similarly sharp inventory changes, many economists are expecting tepid growth in the quarters ahead. Ian Shepherdson, chief United States economist at High Frequency Economics, expects output to expand by a mere 1 or 2 percent, at an annualized rate, this quarter and next.
The biggest challenge going forward is the job market.
“Our focus must remain on getting Americans back to work,” Christina Romer, chairwoman of the President’s Council of Economic Advisers, said in a statement. “That G.D.P. rose strongly in the fourth quarter of last year while employment fell and the workweek increased only slightly emphasizes the need for policy actions designed to help spur private-sector job creation.”
