US GDP For First Quarter Revised Slightly Down By Commerce Department's Bureau Of Economic Analysis To 2.4% From 2.5%
The U.S. economy grew at a slightly less robust pace in the first three months of the year than the Commerce Department had initially estimated.
The department's Bureau of Economic Analysis said Thursday that the slight downward revision of its initial calculation of first-quarter gross domestic product (GDP), from 2.5 percent to 2.4 percent, reflects the fact that "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."
GDP measures the market value of final goods and services produced by a nation's labor and property.
Analysts said the revised GDP number is better than it appears.
"For a start, these are annualized figures, so the difference is trivial. In addition, government expenditure is now estimated to have contracted by 4.9 percent, rather than 4.1 percent, making it a full 1 percent drag on GDP growth, rather than just a 0.8 percent drag," said Paul Ashworth, chief U.S. economist for Capital Economics.
"The fiscal squeeze will continue for the rest of this year, but it should begin to ease off after that. Otherwise, the private sector appears to be doing well. Consumption growth is now estimated to have accelerated to 3.4 percent annualized in the first quarter, up from the initial estimate of a 3.2 percent gain. This is even more impressive given the expiry of the payroll tax cut at the end of last year."
Last month the BEA estimated that the nation's economy grew 2.5 percent, after a fourth-quarter increase of 0.4 percent. The BEA said at the time that consumers and exports contributed to the growth.
"The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, exports, residential investment and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending," the BEA said at the time. "Imports, which are a subtraction in the calculation of GDP, increased."
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