One reason economists are not expecting much of a bounce this quarter is that consumer spending in the first three months was at a very low ebb. Another is that government spending at the Federal, state and local level is almost certain to slow further.
In the first quarter, government spending rose by a mere 0.9 percent, following a 4.6 percent rise in the fourth quarter of last year. Spending by state and local governments, which are facing their worst fiscal crisis since World War II, fell by 0.1 percent. Federal spending was up by 2.6 percent.
Dudley added that Friday's report increases "political pressure on the Fed to think hard about easing monetary policy."
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