US GDP MISSES EXPECTATIONS—GROWS 2.2%

Ford Factory Assembly Line Woman EngineA worker builds an engine for a 2012 Ford Focus on the assembly line at the Ford Motor Co.’s Michigan Assembly Plant.

Photo: Bill Pugliano/Getty Images

It’s out, and it’s a miss on the headline number.Here are the key figures from the BEA:

GDP Q/Q Growth: 2.2% versus 2.5% growth expected (annualized)

Personal Consumption: 2.9% versus 2.3% growth expected

Last quarter GDP expanded by 3.0 per cent.

Much of the increase in GDP was driven by motor vehicle output, which accounted for 1.12 percentage points of the increase.

Looking at nominal growth, GDP expanded by 3.8 per cent, or by $142.4 billion, to an annualized pace of output of $15.461 trillion. 

Declines in government acted as a heavy headwind to the headline number. Here’s why GDP hit in all the right place >

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From the release:

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 added 0.05
percentage point to 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, compared with an increase of 1.1 per cent in the fourth.
Excluding food and energy prices, the price index for gross domestic purchases increased 2.2 per cent in
the first quarter, compared with an increase of 1.2 per cent in the fourth.

Real personal consumption expenditures increased 2.9 per cent in the first quarter, compared with
an increase of 2.1 per cent in the fourth. Durable goods increased 15.3 per cent, compared with an
increase of 16.1 per cent. Nondurable goods increased 2.1 per cent, compared with an increase of 0.8
per cent. Services increased 1.2 per cent, compared with an increase of 0.4 per cent.

Real nonresidential fixed investment decreased 2.1 per cent in the first quarter, in contrast to an
increase of 5.2 per cent in the fourth. Nonresidential structures decreased 12.0 per cent, compared with a
decrease of 0.9 per cent. Equipment and software increased 1.7 per cent, compared with an increase of
7.5 per cent. Real residential fixed investment increased 19.1 per cent, compared with an increase of 11.6
per cent.

Real exports of goods and services increased 5.4 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 4.3 per cent,
compared with an increase of 3.7 per cent.

Real federal government consumption expenditures and gross investment decreased 5.6 per cent
in the first quarter, compared with a decrease of 6.9 per cent in the fourth. National defence decreased
8.1 per cent, compared with a decrease of 12.1 per cent. Nondefense decreased 0.6 per cent, in contrast to
an increase of 4.5 per cent. Real state and local government consumption expenditures and gross
investment decreased 1.2 per cent, compared with a decrease of 2.2 per cent.

The change in real private inventories added 0.59 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 $69.5 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 1.6
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 2.1 per cent in the first quarter, compared with an increase of 3.1 per cent in the
fourth.

Disposition of personal income

Current-dollar personal income increased $119.6 billion (3.7 per cent) in the first quarter,
compared with an increase of $105.3 billion (3.3 per cent) in the fourth.

Personal current taxes increased $38.6 billion in the first quarter, compared with an increase of
$21.1 billion in the fourth.

Disposable personal income increased $81.0 billion (2.8 per cent) in the first quarter, compared
with an increase of $84.2 billion (2.9 per cent) in the fourth. Real disposable personal income increased
0.4 per cent, compared with an increase of 1.7 per cent.

Personal outlays increased $145.9 billion (5.3 per cent) in the first quarter, compared with an
increase of $86.4 billion (3.1 per cent) in the fourth. Personal saving — disposable personal income less
personal outlays — was $466.0 billion in the first quarter, compared with $530.8 billion in the fourth.
The personal saving rate — saving as a percentage of disposable personal income — was 3.9 per cent in
the first quarter, compared with 4.5 per cent in the fourth. For a comparison of personal saving in BEA’s
national income and product accounts with personal saving in the Federal Reserve Board’s flow of funds
accounts and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Current-dollar GDP

Current-dollar GDP — the market value of the nation’s output of goods and services — increased
3.8 per cent, or $142.4 billion, in the first quarter to a level of $15,461.8 billion. In the fourth quarter,
current-dollar GDP also increased 3.8 per cent, or $143.3 billion.

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