GDP Holding

   For all its troubles, the U.S. has so far evaded the severity of the economic malaise affecting Europe.

   While the European Union has posted six straight quarters of negative GDP data, the U.S. kept its first quarter 2013 growth rate, according to revised figures released today by the government. A second look at the first three months of this year showed GDP growing at 2.5 percent, compared to 2.4 percent posted earlier. In the fourth quarter of 2012, the growth rate was 0.4 percent.
   The question now is, will expansion hold?

   The U.S. is the world's largest producer of goods and services -- the definition of Gross National Product -- but not all of it is sold domestically. If overseas markets collapse, they can drag down the U.S. economy, and American producers will have to cut production as exports diminish. Either that, or they'll have to trim domestic prices to make up the difference in sales.
   At the same time, they could face competition from overseas suppliers, who will also cut prices to maintain sales.

   So two fiscal quarters of economic growth is good news, but if the rest of the world continues its downward trend, the spiral may engulf the U.S. as well.