Cross Timbers Business Report
Published by the College of Business Administration, Tarleton State University
Articles by Members of Delta Mu Delta, Valerie Stevens, Student Editor
Volume 24, No.3
Spring 2011
GDP Growth Slows
By Kevin A. Jones
The Wall Street Journal reports the U.S.
economic growth rate slowed considerably in the
first quarter of 2011. Real gross domestic product
(GDP), the value of all final goods and services
produced in the U.S., which increased steadily in
the past several quarters, began 2011 with a sharp
slowdown. Last quarter's growth rate of 1.7 percent
falls far below the previous period's 3.1 percent
increase.
Changes in Real GDP
Annual Percentage Rates
6
4
2
4.9
3.1
2.5
-0.7
-6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009 2010 2011
Source: Bureau of Economic Analysis, U. S. Department of Commerce
For the U.S. economy, which is trying to over-
come the recent recession, the information
represents a setback. However, analysts predict the
recovery will get back on track in 2011's second
half.
The housing market continued its decline, fall-
ing by 4.1 percent in early 2011 after a 3.3 percent
rise at the end of 2010. Business spending slowed
from an increase of 7.7 percent in late 2010 to a rise
of only 1.8 percent this year. Exports, which
increase GDP, grew by 4.9 percent in this year's
beginning quarter. The ending quarter for 2010 had
an impressive 8.6 percent increase. Imports in-
creased by 4.4 percent in 2011's first quarter fol-
lowing a 12.6 percent decline in late 2010.
A significant decline in government spending
also affected the economy. Federal spending went
down 7.9 percent for this quarter compared to the
0.3 percent decrease in the report on the fourth
quarter of 2010. This is said to be the largest drop
in more than ten years. This decrease, along with
the continued slowdown in state and local govern-
ment spending, combined to create poor growth
conditions in the U.S. economy.
Gross domestic product estimates are reported
on a quarterly basis by the Department of Com-
merce. A second GDP estimate with more com-
plete data will be released at a later date.
Kevin A. Jones is a senior marketing major at Tar-
leton State University. Kevin is pursuing his degree
while maintaining employment with UPS.
Inflation Worsens in First Quarter
By Courtney Angell
Alarms rose from economists as annual percen-
tage increases in consumer prices rose above their
goal of inflation during 2011's first three months.
In the first quarter of 2011, prices rose at a 4.7
percent rate in January, 6.2 percent in February, and
7 percent in March. These increases are well over
the maximum 4 percent goal rate for inflation set by
many economists.
According to the Bureau of Labor Statistics,
gasoline and food prices continued to rise and ac-
counted for almost three quarters of the consumer
price increase. Gasoline prices have risen 14.4 per-
cent in the last three months, and this trend does not
appear to be slowing.
The Wall Street Journal noted that underlying
inflation, which excludes food and energy prices,
only rose by 0.1 percent from February to March.
Courtney Angell is a junior majoring in Accounting
at Tarleton State University.
