Growth in the economy between January and March was the slowest in a single quarter since 2003, when the country was emerging from a recession, the Commerce Department reported today. And much of that slowing was attributed to the slow housing market throughout the country.
The gross domestic product, a measure of the nation’s goods and services produced, rose just 1.3 percent in the first quarter, compared to a 5.6 percent rate a year ago.
The slow housing market alone subtracted nearly one percentage point from that number. Other losses were attributed to a growing trade deficit and slow government spending, but the drops were offset somewhat by strong consumer spending the New York Times reported.
This week, the National Association of Realtors reported a major slowdown in the sales of existing homes. The drop from February to March was the biggest drop since 1989, the group reported.
The slow growth didn’t stop inflation. An index that tracks inflation, the GDP price index, jumped in the first quarter by 4 percent, the biggest increase in 16 years.
The Federal Reserve, which sets interest rates, has said its first priority is curbing inflation. That could mean rising rates for borrowers, which would make mortgages on homes more expensive and could restrict further the pool of able homebuyers.