GDP RIGHT IN LINE AT +1.9% IN Q1 SECOND READING

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The U.S. economic expansion logged in the first quarter was revised down by 30 basis points to an annual pace of growth of 1.9 per cent.Click here for updates >

Below, actual readings verse estimates:

GDP (Q/Q): +1.9% vs. +1.9%

Personal Consumption: +2.7% vs. 2.9%

GDP Pride Index: +1.7% vs. +1.5%

Core PCE (Q/Q): +2.1% vs. +2.1%

Below, actual readings verse first reading:

GDP (Q/Q): +1.9% vs. +2.2%

Personal Consumption: +2.7% vs. 2.9%

GDP Pride Index: +1.7% +1.5%

Core PCE (Q/Q): +2.1% vs. +2.1%

According to the Bureau of Economic Analysis, motor vehicle sales were responsible for much of the uptick in GDP, contributing 1.12 percentage points of the gain.

Sales of computers, however, weighed on overall results, weighing on total GDP gains by 0.03 percentage points.

From the release:

—————————

Real gross domestic product — the output of goods and services produced by labour and property
located in the United States — increased at an annual rate of 1.9 per cent in the first quarter of 2012 (that
is, from the fourth quarter to the first quarter), according to the “second” estimate released by the Bureau
of Economic Analysis. In the fourth quarter of 2011, real GDP increased 3.0 per cent.

The GDP estimate released today is based on more complete source data than were available for
the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.2
per cent (see “Revisions” on page 3).

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

The deceleration in real GDP in the first quarter primarily reflected a deceleration in private
inventory investment, an acceleration in imports, and a deceleration in nonresidential fixed investment
that were partly offset by accelerations in exports and in PCE.
___________________
BOX.
Annual Revision of the National Income and Product Accounts

The annual revision of the national income and product accounts (NIPAs), covering the first
quarter of 2009 through the first quarter of 2012, will be released along with the “advance” estimate of
GDP for the second quarter of 2012 on July 27, 2012. The August Survey of Current Business will
contain an article that describes the annual revision in detail.
___________________
FOOTNOTE.
Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified.
Quarter-to-quarter dollar changes are differences between these published estimates. per cent changes
are calculated from unrounded data and are annualized. “Real” estimates are in chained (2005) dollars.
Price indexes are chain-type measures.

This news release is available on BEA’s Web site along with the Technical Note and Highlights
related to this release. For information on revisions, see “Revisions to GDP, GDI, and Their Major
Components.”
___________________

Motor vehicle output added 1.12 percentage points to the first-quarter change in real GDP after
adding 0.47 percentage point to the fourth-quarter change. Final sales of computers subtracted 0.03
percentage point from the first-quarter change in real GDP after adding 0.12 percentage point to the
fourth-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 2.4 per cent in the first quarter, this index increased 1.1 per cent in the fourth quarter.
Excluding food and energy prices, the price index for gross domestic purchases increased 2.3 per cent in
the first quarter, compared with an increase of 1.2 per cent in the fourth.

Real personal consumption expenditures increased 2.7 per cent in the first quarter, compared with
an increase of 2.1 per cent in the fourth. Durable goods increased 14.3 per cent, compared with an
increase of 16.1 per cent. Nondurable goods increased 2.3 per cent, compared with an increase of 0.8
per cent. Services increased 1.0 per cent, compared with an increase of 0.4 per cent.

Real nonresidential fixed investment increased 1.9 per cent in the first quarter, compared with an
increase of 5.2 per cent in the fourth. Nonresidential structures decreased 3.3 per cent, compared with a
decrease of 0.9 per cent. Equipment and software increased 3.9 per cent, compared with an increase of
7.5 per cent. Real residential fixed investment increased 19.4 per cent, compared with an increase of 11.6
per cent.

Real exports of goods and services increased 7.2 per cent in the first quarter, compared with an
increase of 2.7 per cent in the fourth. Real imports of goods and services increased 6.1 per cent,
compared with an increase of 3.7 per cent.

Real federal government consumption expenditures and gross investment decreased 5.9 per cent
in the first quarter, compared with a decrease of 6.9 per cent in the fourth. National defence decreased
8.3 per cent, compared with a decrease of 12.1 per cent. Nondefense decreased 0.8 per cent, in contrast to
an increase of 4.5 per cent. Real state and local government consumption expenditures and gross
investment decreased 2.5 per cent, compared with a decrease of 2.2 per cent.

The change in real private inventories added 0.21 percentage point to the first-quarter change in
real GDP, after adding 1.81 percentage points to the fourth-quarter change. Private businesses increased
inventories $57.7 billion in the first quarter, following an increase of $52.2 billion in the fourth quarter
and a decrease of $2.0 billion in the third.

Real final sales of domestic product — GDP less change in private inventories — increased 1.7
per cent in the first quarter, compared with an increase of 1.1 per cent in the fourth.

Gross domestic purchases

Real gross domestic purchases — purchases by U.S. residents of goods and services wherever
produced — increased 1.9 per cent in the first quarter, compared with an increase of 3.1 per cent in the
fourth.

Gross national product

Real gross national product — the goods and services produced by the labour and property
supplied by U.S. residents — increased 1.3 per cent in the first quarter, compared with an increase of 1.8
per cent in the fourth. GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which decreased $16.4 billion in the first quarter after decreasing $36.7 billion in the fourth; in
the first quarter, receipts decreased $4.2 billion, and payments increased $12.1 billion.

Current-dollar GDP

Current-dollar GDP — the market value of the nation’s output of goods and services — increased
3.6 per cent, or $134.6 billion, in the first quarter to a level of $15,454.0 billion. In the fourth quarter,
current-dollar GDP increased 3.8 per cent, or $143.3 billion.

Gross domestic income

Real gross domestic income (GDI), which measures the output of the economy as the costs
incurred and the incomes earned in the production of GDP, increased 2.7 per cent in the first quarter,
compared with an increase of 2.6 per cent in the fourth. For a given quarter, the estimates of GDP and
GDI may differ for a variety of reasons, including the incorporation of largely independent source data.
However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of
change.

Revisions

The “second” estimate of the first-quarter change in real GDP is 0.3 percentage point, or $11.4
billion, lower than the advance estimate issued last month, primarily reflecting a downward revision to
private inventory investment, an upward revision to imports, and downward revisions to state and local
government spending and to personal consumption expenditures that were partly offset by upward
revisions to nonresidential fixed investment and to exports.

Advance Estimate Second Estimate
(per cent change from preceding quarter)

Real GDP……………………………. 2.2 1.9
Current-dollar GDP…………………… 3.8 3.6
Gross domestic purchases price index…….. 2.4 2.4

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