U.S. GDP growth unlikely to be sustained into Q2 - analyst

WASHINGTON (AFX) - The stronger-than-expected first quarter GDP growth of 2.0 pct is unlikely to be sustained going into the second quarter, as the outlook for consumption will weigh on the economy, said Gary Thayer, senior economist at AG Edwards."We had predicted 2.0 pct for Q1 GDP growth," Thayer noted, but "we have the second quarter at zero growth."The drop in expected growth during the second quarter will be led by declining consumption growth, which registered a 3.0 pct rise in the first quarter."We are still concerned about the consumer -- layoffs will keep the consumer sector weak," Thayer said.The Commerce Department earlier reported that U.S. GDP rose a larger than expected 2.0 pct in the first quarter, after rising 1.0 pct in the fourth quarter of 2000. The growth was led by consumption and residential construction.Consumer spending on goods and services rose 3.1 pct in the first quarter, up from a 2.8 pct rise in the fourth quarter. "We had a good snap back in consumption in the first quarter," Thayer noted, on the back of strong car and truck sales."Thayer said while these sales may still be fair into the second quarter, they are unlikely to show growth from such a strong base.However, Thayer concluded today's report does show "our economy still has some resilience," and noted that inventories declined in the quarter.This could be a positive sign, as the Federal Reserve indicated in its FOMC statement last week, that the inventory correction may be coming to an end.One area of concern, however, is the second consecutive quarter of declining investment in equipment and software, Thayer said. 

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