Cross Timbers Business Report, Volume 18, Number 3, Spring 2005 Page: 1
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Cross Timbers Business Report
Published by the College of Business Administration, Tarleton State University
Articles by Members of Delta Mu Delta, William L. Beaty, EditorFirst Quarter Output Expands at Decelerating Pace
By Sukaina Jafri, Student EditorThe United States economy grew at an annual rate of
3.1 percent for the first quarter of 2005, slightly below the
3.5 percent rate predicted by a consensus of economists.
This figure represents the slowest growth GDP has experi-
enced in two years, after the figure for the last quarter of
2004 was revised to 3.8 percent.
Changes in Real GDP
Annual Percentage Rates
7.2
6
4.4
4 4.1 3.9 3 .
o
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2003 2004 2005
Source: Bureau of Economic Analysis, U. S. Department of Commerce
Gross domestic product (GDP), a measure of all the
final goods and services produced in the United States has
been gradually increasing but at rates that have disappointed
some observers. GDP is composed of consumer spending,
business investment, government spending, and net exports.The sluggishness of the U.S. economy is partially due
to a surge in the price of oil. This increase led to a re-
strained advance in both business and consumer spending.
Consumer spending, which accounts for more than two-
thirds of all U.S. economic activity, rose by 3.5 percent,
less than the 4.2 percent gain seen in the fourth quarter of
2004. Business investment increased by 4.7 percent.
However, spending on equipment and software is lower
than it has been in the last two years.
High oil prices aided in widening the trade deficit and
further hindered economic growth. Retail sales also
waned with a 2.8 percent decrease for big-ticket manufac-
tured goods for the month of March.
The first quarter readings, which are below expecta-
tions, are not particularly inspiring. Chief U.S. economist
Joshua Shapiro at MFR Inc. said, "Uncertainty abounds,
particularly relating to the duration and magnitude of both
the growth slowdown and the acceleration in core infla-
tion." In contrast Steven Wood of Insight Economics
wrote that "growth is still strong enough, and inflation is
still high enough" to keep the Federal Reserve tightening
interest rates at a "measured" pace.
The Commerce Department will obtain additional
data over the next two months that may lead to significant
revisions of the current estimate of the first quarter's eco-
nomic growth.
Sukaina Jafri is a graduating economics major at Tarleton
State University.The Rise and Fall of Unemployment Rates
By Jasmine KingThe national unemployment rate fluctuated slightly
from the months of January through March 2005, varying
from 5.2 percent to 5.4 percent. The nation's jobless rate
averaged 5.3 percent this quarter. This figure is down from
previous year's 5.7 percent average.
Texas, when compared to the nation, has experienced
consistently higher unemployment rates. As of March, un-
employment moved favorably to 5.6 percent from 6.0 per-
cent the previous month. The average unemployment rate
for the state's first quarter of 2004 was 5.8 percent -- below
the 6.3 percent average of previous year.In the Cross Timbers Area, all five counties reported
similar or lower unemployment rates than either the na-
tional or state averages. Last year's rates were signifi-
cantly lower then both Texas and national rates.
Bosque County's unemployment rate was high at 5.6
percent in January identical to month of February before
declining to 4.9 percent in March. This quarter's average
of 5.4 percent is higher than the 5.2 percent in 2004.
In Comanche County, the jobless rate was 5.1 percent
in January and February then dropped 4.7 percent in
March. This rate is significantly higher than years 2003
and 2004. The first quarter average jobless rate of 5.0Volume 18, No. 3
Spring 2005
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Tarleton State University. College of Business Administration. Cross Timbers Business Report, Volume 18, Number 3, Spring 2005, periodical, Spring 2005; Stephenville, Texas. (https://texashistory.unt.edu/ark:/67531/metapth284668/m1/1/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Tarleton State University.