U.S. Economy Grew 1.8% in Q1


United States GDP increased at an annual rate of 1.8 percent in the first quarter of 2011 (that is, from the fourth quarter to the first quarter) according to the advance estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 3.1 percent.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

Motor vehicle output added 1.40 percentage points to the first-quarter change in real GDP after subtracting 0.27 percentage point from the fourth-quarter change.  Final sales of computers added 0.12 percentage point to the first-quarter change in real GDP after adding 0.35 percentage point to the fourth- quarter change.

Real personal consumption expenditures increased 2.7 percent in the first quarter, compared with an increase of 4.0 percent in the fourth.  Durable goods increased 10.6 percent, compared with an increase of 21.1 percent.  Nondurable goods increased 2.1 percent, compared with an increase of 4.1 percent.  Services increased 1.7 percent, compared with an increase of 1.5 percent.

Real nonresidential fixed investment increased 1.8 percent in the first quarter, compared with an increase of 7.7 percent in the fourth.  Nonresidential structures decreased 21.7 percent, in contrast to an increase of 7.6 percent.  Equipment and software increased 11.6 percent, compared with an increase of 7.7 percent.  Real residential fixed investment decreased 4.1 percent, in contrast to an increase of 3.3 percent.

Real exports of goods and services increased 4.9 percent in the first quarter, compared with an increase of 8.6 percent in the fourth.  Real imports of goods and services increased 4.4 percent, in contrast to a decrease of 12.6 percent.

Real federal government consumption expenditures and gross investment decreased 7.9 percent in the first quarter, compared with a decrease of 0.3 percent in the fourth.  National defense decreased 11.7 percent, compared with a decrease of 2.2 percent.  Nondefense increased 0.1 percent, compared with an increase of 3.7 percent.  Real state and local government consumption expenditures and gross investment decreased 3.3 percent, compared with a decrease of 2.6 percent.

The change in real private inventories added 0.93 percentage point to the first-quarter change in real GDP after subtracting 3.42 percentage points from the fourth-quarter change.  Private businesses increased inventories $43.8 billion in the first quarter, following increases of $16.2 billion in the fourth quarter and $121.4 billion in the third.


TradingEconomics.com, US Bureau of Economic Analysis
4/28/2011 1:39:12 PM