US Economy Expands Only 0.2% in Q1


The United States economy grew at an annual rate of 0.2 percent in the first quarter of 2015, according to the "advance" estimate. It was the weakest expansion since the first quarter of 2014 as business investment and exports slumped and consumption grew at a slower pace.

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

The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 1.5 percent in the first quarter, compared with a decrease of 0.1 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 0.3 percent, compared with an increase of 0.7 percent.

Real personal consumption expenditures increased 1.9 percent in the first quarter, compared with an increase of 4.4 percent in the fourth.  Durable goods increased 1.1 percent, compared with an increase of 6.2 percent.  Nondurable goods decreased 0.3 percent, in contrast to an increase of 4.1 percent. Services increased 2.8 percent, compared with an increase of 4.3 percent.

Real nonresidential fixed investment decreased 3.4 percent in the first quarter, in contrast to an increase of 4.7 percent in the fourth.  Investment in nonresidential structures decreased 23.1 percent, in contrast to an increase of 5.9 percent. Investment in equipment increased 0.1 percent, compared with an increase of 0.6 percent.  Investment in intellectual property products increased 7.8 percent, compared with an increase of 10.3 percent. Real residential fixed investment increased 1.3 percent, compared with an increase of 3.8 percent.

Real exports of goods and services decreased 7.2 percent in the first quarter, in contrast to an increase of 4.5 percent in the fourth.  Real imports of goods and services increased 1.8 percent, compared with an increase of 10.4 percent.

Real federal government consumption expenditures and gross investment increased 0.3 percent in the first quarter, in contrast to a decrease of 7.3 percent in the fourth. National defense decreased 0.7 percent, compared with a decrease of 12.2 percent.  Nondefense increased 1.9 percent, compared with an increase of 1.5 percent. Real state and local government consumption expenditures and gross investment decreased 1.5 percent, in contrast to an increase of 1.6 percent.

The change in real private inventories added 0.74 percentage point to the first quarter change in real GDP after subtracting 0.10 percentage point from the fourth-quarter change. Private businesses increased inventories $110.3 billion in the first quarter, following increases of $80.0 billion in the fourth quarter and of $82.2 billion in the third.

US Economy Expands Only 0.2% in Q1


US Bureau of Economic Analysis | anna@tradingeconomics.com
4/29/2015 2:13:23 PM