US GDP Growth Revised Down to 2.4% in Q1


Real gross domestic product in the United States increased at an annual rate of 2.4 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis. Drop in government spending and slower inventory building overshadowed the big increase in consumer spending.

The GDP estimate released on May 30th is based on more complete source data than were available for the "advance" estimate issued last month.  In the advance estimate, real GDP increased 2.5 percent. With the second estimate for the first quarter, increases in private inventory investment, in exports, and in imports were less than previously estimated, but the general picture of overall economic activity is not greatly changed.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and exports 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.

Real personal consumption expenditures increased 3.4 percent in the first quarter, compared with an increase of 1.8 percent in the fourth.  Durable goods increased 8.2 percent, compared with an increase of 13.6 percent. Nondurable goods increased 2.2 percent, compared with an increase of 0.1 percent. Services increased 3.1 percent, compared with an increase of 0.6 percent.

Real nonresidential fixed investment increased 2.2 percent in the first quarter, compared with an increase of 13.2 percent in the fourth. Nonresidential structures decreased 3.5 percent, in contrast to an increase of 16.7 percent. Equipment and software increased 4.6 percent, compared with an increase of 11.8 percent. Real residential fixed investment increased 12.1 percent, compared with an increase of 17.6 percent.

Real exports of goods and services increased 0.8 percent in the first quarter, in contrast to a decrease of 2.8 percent in the fourth. Real imports of goods and services increased 1.9 percent, in contrast to a decrease of 4.2 percent.

Real federal government consumption expenditures and gross investment decreased 8.7 percent in the first quarter, compared with a decrease of 14.8 percent in the fourth. National defense decreased 12.1 percent, compared with a decrease of 22.1 percent. Nondefense decreased 2.1 percent, in contrast to an increase of 1.7 percent.  

The change in real private inventories added 0.63 percentage point to the first-quarter change in real GDP, after subtracting 1.52 percentage points from the fourth-quarter change.  Private usinesses increased inventories $38.3 billion in the first quarter, following an increases of $13.3 billion in the fourth quarter and $60.3 billion in the third.



U.S. Bureau of Economic Analysis, Anna Fedec, anna@tradingeconomics.com
5/30/2013 1:48:08 PM