Rates Better After 1Q2010 GDP +3.2%, Consumer Spending +3.6%. View GDP Last 10 Quarters.

The first of three 1Q2010 GDP readings came in today at +3.2%, lower than 4Q’s +5.6% reading but still seen as a positive economic growth number, especially since consumer spending was +3.6% vs. +1.6% in 4Q. Last quarter, it became official that we’ve had two consecutive quarters of GDP growth—following four consecutive quarters of economic contraction (a 60yr record for consecutive GDP declines). Now this advance number adds to that trend. Other key contributors to positive GDP reading (besides consumer spending) were private inventory investment, exports, and nonresidential fixed investment. These were partly offset by decreases in state and local government spending and in residential fixed investment.

Also this morning the DOJ announced a criminal investigation into Goldman Sachs for it’s mortgage securities practices. Mortgage bonds are currently up about 15 basis points which means slightly better rates. The solution to Greece’s debt problems is still being hammered out but that uncertainty (plus S&P’s downgrade of Greece and Portugal bonds Tuesday) have also caused mortgage bonds to rally and push rates down. As for the consumer spending component of GDP, we’ll get another read on that Monday when the Personal Income & Outlays report is released. All GDP figures are ‘real’ or inflation-adjusted, and the next GDP reading for 1Q10 will come on May 27. The last nine quarters of GDP are at the bottom of this post, and you can also visit our Data section to see historical GDP figures, graphs and download data.

As of November 25, 2008, -0.5% GDP was the largest quarterly decline since the tail end of the last recession in 2001. Six days after that release, the NBER declared a recession had been in effect since December 2007 and also countered the popular definition of recession as two consecutive quarters of negative GDP growth, saying that they evaluate many factors in addition to GDP. This falls well in line with the beginning of the credit crunch in August 2007 and the multi-layered factors that have led to the recession that’s lasted two years. Recession beginnings and endings are always officially called after the fact, and while 4Q09 and 1Q10 GDP suggest a recovery, 9.7% unemployment suggests otherwise. Here is the press release for today’s figures.

4Q2007: -0.2% (final)
1Q2008: +0.9% (final)
2Q2008: +2.8% (final)
3Q2008: -0.5% (final)
4Q2008: -6.3 (final)
ALL 2008: +0.4% (final)
1Q2009: -6.4% (final)
2Q2009: -0.7% (final)
3Q2009: +2.2% (final)
4Q2009: +5.6 (final)
ALL 2009: -2.4% (final)
1Q2010: +3.2 (advance)