U.S. Economy Shows Sign Of Recovery As Q1 GDP Contracts By 5.5%

Mayur Pahilajani - AHN News Writer

Washington, D.C. (AHN) - An official report showed Thursday that the U.S.'s economy continued to contract in the first three months of 2009 as the gross domestic product shrank, during the worst recession in over 60 years, but was not as steep as expected, which could be a positive sign.
The first quarter's real gross domestic product contracted by 5.5 on annualized seasonally adjusted rate, from the previous quarter's drop of 6.3 percent, according to the final estimate released by the Commerce Department on Thursday.
Real gross domestic product (GDP) is the measure of the value of goods and services produced in the world's largest economy. The final estimate of quarterly growth today reflected negative contributions from exports, equipment and software, private inventory investment, nonresidential structures, and residential fixed investment.
These factors partly offset by a positive contribution from personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, decreased
The market analysts had expected the U.S. economy for the January to March quarter to decline on annualized basis by 5.7 percent.
The economists expect the U.S. economy to fall in second quarter ending June 30 by 1.5 percent on annual rate, but it would be less then the current estimation.
In April, they were expecting the second quarter GDP to contract by 1.9 percent, while in the quarter starting
One feature of economic data releases has been the revisions to the previous month's data. Today's report showed an upward revision, indicating an improving situation. This is expected to boost traders' confidence in data.
In the last four quarters, the U.S. economy has slipped by 2.5 percent, which is considered to be the largest year-over-year drop since 1982. The GDP index had increased by 1.1 percent in 2008 on an annual basis, compared with an increase of 2.0 percent in 2007.
Excluding food and energy prices, the price index for gross domestic purchases was unrevised at 1.4 percent in the first quarter, after moving up by 0.9 percent in the fourth quarter, the report noted.
Spending by consumers, or real personal consumption expenditures, in the quarter increased by 1.4 percent rate, compared with a decrease of 4.3 percent in the fourth quarter.
Real nonresidential fixed investment decreased by 37.3 percent, followed by investment in housing slipped by 38.8 percent amid already declining real estate sales.
The report showed that exports of goods and services were down by 30.6 percent in the first quarter, compared with a decrease of 23.6 percent in the fourth.
Imports of goods and services in the quarter decreased by 36.4 percent, compared with a decline of 17.5 percent.

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Survey Says Virtualization Can Play Major Role in Disaster Recovery - But Not Provide Complete Solution

Virtualization, Cloud Computing and Grid Networking All on Horizon for Recovery Strategies
WAYNE, Pa., June 25 /PRNewswire/ -- A large majority of information technology (IT) executives say virtualization technologies can play a major role in a disaster recovery plan -- but these technologies are not a complete solution, according to the results of the State of Disaster Recovery survey conducted by Harris Interactive(R). While many IT decision-makers say they have deployed virtualization, survey data show most had not yet utilized the technology in a disaster recovery situation.
In the survey, commissioned by SunGard Availability Services, 74 percent of IT respondents indicate virtualization can play a major role but is not a total solution for disaster recovery plans. One-quarter of IT respondents say they would never include virtualization technologies in their disaster recovery plans.
Sixty percent of IT respondents say they have virtualization in place now as a recovery tool from unplanned outages -- but only 29 percent have used it successfully with eight percent saying they used virtualization but unsuccessfully. Another 29 percent of IT decision-makers say they have deployed virtualization but not yet used it as a tool for disaster recovery.
"Virtualization technologies are changing the way disaster recovery solutions are developed and deployed -- for both end-user organizations and third-party service providers," said Don Norbeck, technology officer, virtualization and product strategy at SunGard Availability Services. "The survey reveals companies see virtualization as part of their disaster recovery strategy, but most recognize they also need more. The Achilles heel of many virtualized IT environments is they depend on a single data center to execute system failover should an outage occur. A recovery strategy with no off-site data center can result in no recovery."
Future Technology Deployments
Over the next two years, half of IT decision-makers indicate their companies will be looking into virtualization as an option for managing unplanned outages and disaster recovery. About a quarter of IT executives say they will be looking into cloud computing and grid networking as potential options.
"The technology landscape for disaster recovery is changing quickly -- presenting challenges for end-user organizations to stay current. These changes demonstrate the value in teaming with a third-party vendor with core competencies in data centers and recoverability to help navigate through information availability issues in virtual, cloud and grid environments," said Mr. Norbeck.
Methodology
This survey was conducted online within the United States by Harris Interactive on behalf of SunGard Availability Services in March 2009 with 497 qualified respondents, including 277 business and 220 IT participants. Qualified business respondents hold at least a director level title and have associated responsibilities, such as business and staff, in business areas. Qualified IT respondents hold at least a manager level title and have associated responsibilities, such as business and staff, in IT areas. All respondents came from companies with 50 or more employees.

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