US GDP Growth Revised Lower to 2%



The US economy expanded an annualized 2 percent on quarter in the first quarter of 2018, below 2.2 percent in the second estimate and market expectations of 2.2 percent. It is the lowest growth rate in a year as business inventories and personal consumption were revised down, the final estimate showed.

Personal consumption expenditure (PCE) contributed 0.6 percentage points to growth (0.71 percentage points in the second estimate) and rose 0.9 percent (1 percent in the second estimate). Services (1.5 percent compared to 1.8 percent) slowed more than anticipated while nondurables (0.5 percent compared to 0.4 percent) rose faster and spending on durable goods shrank less (-2.1 percent compared to -2.6 percent). 

Fixed investment added 1.23 percentage points to growth (1.05 percentage points in the second estimate) and increased 7.6 percent (6.5 percent in the second estimate). Investment rose faster than anticipated for equipment (5.8 percent compared to 5.5 percent), structures (16.2 percent compared to 14.2 percent) and intellectual property products (13.2 percent compared to 10.9 percent) but contracted 1.1 percent for residential (compared to a 2 percent fall in the second estimate).

The contribution from private inventories was basically null (-0.01 percent), compared to +0.13 in the final estimate. 

Meanwhile, exports (3.6 percent compared to 4.2 percent) rose less than predicted while imports (3.2 percent compared to 2. 8 percent) increased more. As a result, the impact from trade was -0.04 percent, much worse than +0.08 percent in the second estimate.

Government spending and investment added 0.22 percentage points to growth, slightly higher than 0.2 percentage points in the second estimate. It increased 1.3 percent, above 1.1 percent earlier reported. 

 US GDP Growth Revised Lower to 2%


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
6/28/2018 12:47:41 PM