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Opposite reactions to economic news

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  • Description

    Is economy growing or under-performing?

  • Duration 2:43
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The American economy -- -- an annual rate of 2.2 percent in the first three months of the year that is laughs.

Then hoped for in less than the growth in the last quarter of 2011.

The Obama administration calls the news encouraging.

The opposition calls it underperforming.

Fox Business Network senior Washington correspondent Peter Barnes looks at the numbers.

The economy grew 2.2 percent in the first quarter the government said thanks in part to clunkers.

Consumers have been driving their old cars for so long to save money that they're breaking down now.

So drivers are racing to dealers to replace them with new models that will save on gasoline and repairs vehicle sales roared ahead by 29%.

In the quarter accounting for about half of the boost to GDP.

Warm weather likely helped consumer spending two and home construction.

I think there's an enormous amount of pent up demand if you look at the at the overall forecast for motor vehicles.

For housing it's about while we're not where we should be it's the same housing we're certainly moving in the right direction.

Still first quarter growth fell short of expectations.

After 3% growth in the fourth quarter economists had been projecting at least about two and a half percent in the first.

-- government spending fell much more than expected defense spending alone down 8%.

And business investment was hit by the expiration of some tax breaks.

The nation's top economist fears the year -- expiration of the big bush tax cuts to combined with more planned spending cuts.

If no action would be taken by the fiscal authorities the size of the fiscal cliff is such that there's I think -- no chance of the Federal Reserve could it could or would.

Have -- Ability whatsoever to offset that.

That effect on the economy.

High gas prices in the European debt crisis helped to stall the recovery last year and they haven't gone away.

Europe has slipped into recession and the debt of Spain was downgraded again Thursday.

We will expect to lose between 50600 million dollars.

In Europe this year as we make this transition to a better plan to deal with this environment they think that -- just continues to be this level of uncertainty that continues to.

-- on everyone strollers and I think really until we get beyond that.

Yeah we definitely risk stalling out as we get into this accident into this.

Somewhere wants.

Economists say that the weaker than expected GDP numbers keep more stimulus from the Federal Reserve on the table for.

Amazing to see the cars dominated that much of the growth half of the growth in the first quarter was from car sales -- you.

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