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Local News

GDP Number Show Consumers Spend Mostly on Necessities


Stocks have been mixed throughout the day today, after the government said the U.S. economy slowed in the first three months of this year. The economy grew at a 1.8% annual rate in the January-March period. That’s the weakest showing since last spring when the European debt crisis reduced growth to 1.7%. Higher prices for oil and gas have constrained consumer spending. Bend financial advisor Troy Reinhart with Northwest Quadrant Wealth Management says high gasoline prices are having an impact: "One of the things we found in the GDP number is that consumers are still spending but instead of buying a new mattress for the home or a new armchair, instead they had to spend it on gas and that is disconcerting. But again oil is being driven more by speculators than it is by actual demand out there. There is still lots of oil out there; demand is not what's pushing it up there’s still uncertainty in the Middle East and speculators.” Reinhart says our economy is getting better, but it doesn't happen overnight. He's also not that concerned about a weekly job claims report that came in at 429,000 new claims. It's the highest since January, but Reinhart believes it’s to be expected as part of our bumpy road to economic recovery.

 

 

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