Government Revises GDP Estimate Down to 2.7% For 1Q

The Government lowered their original first quarter estimates regarding the Gross Domestic Product, due to a an underestimate of consumer spending. Even though the estimate is lower, it does mark the third consecutive quarter of growth. Check out the following story about the adjustment courtesy of USA Today:

Gross domestic product rose at a 2.7% annual rate in the January-to-March period, the Commerce Department said Friday. That was less than the 3% estimate for the quarter that the government released last month. It was also much slower than the 5.6% pace in the previous quarter.

GDP measures the value of all goods and services produced in the United States and is considered the best measure of the country's economic health.

The economy has now grown for three consecutive quarters after shrinking for four straight during the recession — the longest contraction since World War II.

In normal times, 2.7% growth would be considered healthy. But it's relatively weak for a recovery after a steep recession. After the last sharp downturn in the early 1980s, GDP grew at annual rates of 7% to 9% for five straight quarters.

Continue reading at USA Today.com…

Wells Fargo Earns $2.4B, Says Credit Is Improving

Despite expectations, Wells Fargo has announced that their credit improved in the force quarter of 2010, and that their losses were much less than had been predicted. Many experts are calling the positive news a sign that American financial institutions are on the road to recovery, along with the economy as a whole.

According to the Associated Press, Wells Fargo & Co. said Wednesday its first-quarter earnings fell 1 percent to $2.37 billion as the bank dealt with continuing losses on consumer loans. It also originated fewer mortgages compared to a year earlier as refinancing activity trickled off.

However, the bank said it believes it has "turned the corner" with its credit problems.

The results surpassed expectations and provided further evidence that the banking industry and the economy are recovering. Wells Fargo rose in early trading and hit a new 52-week high of $34.25, but was down 62 cents, or 1.9 percent, at $33.06 by midday.

Investors appeared to have doubts about consumers' ability to pay their bills because many banks are still reporting a high number of loan defaults.

San Francisco-based Wells Fargo joined other big banks in the most recent quarter in reporting improvement in their consumer loan businesses.

Continue reading at Google News…