NEWSRELEASE
For Release: May 5, 2005 Small Business Economic Conditions Moderate Real GDP Growth of 3.1 Percent, Unemployment Falls To 5.2
Percent WASHINGTON, D.C. - Economic conditions for small businesses moderated in the
first quarter of 2005, according to the Office of Advocacy’s newly released
Quarterly Indicators: The Economy And Small Business. The report shows real
gross domestic product (GDP) growth of 3.1 percent in the quarter and
unemployment falling to 5.2 percent. “The economy cooled in the first quarter of 2005 as higher energy costs
weighed on the public’s mind,” said Dr. Chad Moutray, Chief Economist for the
Office of Advocacy. “While real GDP grew at 3.1 percent, that is slower than the
previous quarter. Small business owners remained optimistic, although at lower
levels than in 2004.” During the quarter, interest rates continued to increase as policymakers
tried to dampen inflationary pressures. The average prime lending rate rose to
5.4 percent, while the 2004 average was 4.3 percent. Nonetheless, the Senior
Loan Officers Survey showed the demand for small business commercial and
industrial loans remained strong. Energy prices played a key role in the first quarter of 2005. The average
price of West Texas crude reached $54.31 a barrel in March 2005 - almost $11
more than the December 2004 average. This increase affected consumer prices, so that between December 2004 and
March 2005 they rose at an annualized 4.25 percent rate, with 1.37 percentage
points of the rise attributable to energy costs. Producer prices followed a
similar pattern. The Office of Advocacy, the “small business watchdog” of the government,
examines the role and status of small business in the economy and independently
represents the views of small business to federal agencies, Congress, and the
President. It is the source for small business statistics presented in
user-friendly formats and it funds research into small business issues. The Quarterly Indictors series, which started in the first quarter of 2004,
is available on the Office of Advocacy web site at
Contact: Kathy
Tobias, (202) 205-6938
kathryn.tobias@sba.gov
SBA Number: 05-22 ADVO
Press Kit
In First Quarter Of 2005
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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit
www.sba.gov/advo, or call (202) 205-6533.