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US Economy Grew From Stimulus Checks, But Just a Bit

Uh-oh spaghetti-o. The economy grew less than expected from April to June despite all the tax rebate checks that were sent out. The news goes right along with the 77 percent of Savvy readers who didn't believe the checks would stimulate the economy.

Gross domestic product expanded at an annual rate of 1.9 percent in the second quarter, primarily because of a burst in export sales powered by the weak dollar, according to The New York Times. The tax stimulus package, which put around $90 billion dollars into consumers' pocketbooks, only prompted a small lift in spending.

  • Economists had expected the economy to grow by 2.3 percent last quarter, primarily because of the $100 billion in tax rebates mailed to consumers in the Spring.
  • Domestic consumption only rose 1.5 percent for the quarter — an improvement over the 0.9 percent rate recorded in the previous period, but less than many had hoped.

Apparently, experts are now wondering how the economy will perform through the Summer and Fall because it seems Americans are cutting back and not spending their stimulus checks as wildly as expected.

Source

Join The Conversation
ilanac13 ilanac13 8 years
i think that the hope in having the checks make an impact was a bit misplaced. we are all in such a finanancial hole that we can't afford to use 'free money' to shop, but instead we need to use it to pay off bills etc. i used all my tax money to pay down things, and i'm still in not the best shape and i really try to manage my funds well. it's just hard sometimes - and i'm not sure that a few hundred dollars in the stimulus would really have made an impact for anyone.
TheMissus TheMissus 8 years
My stimulus check - no lie - was for $1.56. The Husband and I refuse to cash it. We are going to frame it and hang it on a wall when we move to Canada next year. It would have been difficult to stimulate the economy with $1.56. We couldn't even get a cup of coffee at Starbucks for that.
bellaressa bellaressa 8 years
Wow, I guess this want Bush wanted. For the most part, people I know used theirs to pay down their debt or pay in advance months on their rent or morgage.
imLissy imLissy 8 years
There are two kinds people: those who are good at saving and those who are good at racking up debt. There are very few people who spend, spend, spend, but only spend the money they have.
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