U.S. GDP Increased 1.8% in First Quarter

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According to the "advance" estimate released by the Bureau of Economic Analysis, real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.8 percent in the first quarter of 2011 (that is, from the fourth quarter to the first quarter). In the fourth quarter, real GDP increased 3.1 percent.

The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the first quarter, based on more complete data, will be released on May 26, 2011.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, 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 sharp upturn in imports, a deceleration in PCE, a larger decrease in federal government spending, and decelerations in nonresidential fixed investment and in exports that were partly offset by a sharp upturn in private inventory investment.

Motor vehicle output added 1.40 percentage points to the first-quarter change in real GDP after subtracting 0.27 percentage point from the fourth-quarter change. Final sales of computers added 0.12 percentage point to the first-quarter change in real GDP after adding 0.35 percentage point to the fourth quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.8 percent in the first quarter, compared with an increase of 2.1 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 2.2 percent in the first quarter, compared with an increase of 1.1 percent in the fourth.

Real personal consumption expenditures increased 2.7 percent in the first quarter, compared with an increase of 4.0 percent in the fourth. Durable goods increased 10.6 percent, compared with an increase of 21.1 percent. Nondurable goods increased 2.1 percent, compared with an increase of 4.1 percent. Services increased 1.7 percent, compared with an increase of 1.5 percent.

Real nonresidential fixed investment increased 1.8 percent in the first quarter, compared with an increase of 7.7 percent in the fourth. Nonresidential structures decreased 21.7 percent, in contrast to an increase of 7.6 percent. Equipment and software increased 11.6 percent, compared with an increase of 7.7 percent. Real residential fixed investment decreased 4.1 percent, in contrast to an increase of 3.3 percent.

Real exports of goods and services increased 4.9 percent in the first quarter, compared with an increase of 8.6 percent in the fourth. Real imports of goods and services increased 4.4 percent, in contrast to a decrease of 12.6 percent.

Real federal government consumption expenditures and gross investment decreased 7.9 percent in the first quarter, compared with a decrease of 0.3 percent in the fourth. National defense decreased 11.7 percent, compared with a decrease of 2.2 percent. Nondefense increased 0.1 percent, compared with an increase of 3.7 percent. Real state and local government consumption expenditures and gross investment decreased 3.3 percent, compared with a decrease of 2.6 percent.

The change in real private inventories added 0.93 percentage point to the first-quarter change in real GDP after subtracting 3.42 percentage points from the fourth-quarter change. Private businesses increased inventories $43.8 billion in the first quarter, following increases of $16.2 billion in the fourth quarter and $121.4 billion in the third.

Real final sales of domestic product -- GDP less change in private inventories -- increased 0.8 percent in the first quarter, compared with an increase of 6.7 percent in the fourth.

Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 1.8 percent in the first quarter, in contrast to a decrease of 0.2 percent in the fourth.

Disposition of personal income

Current-dollar personal income increased $256.0 billion (8.3 percent) in the first quarter, compared with an increase of $128.5 billion (4.1 percent) in the fourth. The sharp acceleration in personal income primarily reflected a downturn in contributions for government social insurance - a subtraction in the calculation of personal income -- resulting from provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that reduced the social security contribution rate by 2 percentage points for 2011.

Personal current taxes increased $63.3 billion in the first quarter, compared with an increase of $26.9 billion in the fourth.

Disposable personal income increased $192.7 billion (6.9 percent) in the first quarter, compared with an increase of $101.6 billion (3.6 percent) in the fourth. Real disposable personal income increased 2.9 percent, compared with an increase of 1.9 percent.

Personal outlays increased $169.1 billion (6.4 percent) in the first quarter, compared with an increase of $142.6 billion (5.4 percent) in the fourth. Personal saving -- disposable personal income less personal outlays -- was $663.6 billion in the first quarter, compared with $640.0 billion in the fourth.

The personal saving rate -- saving as a percentage of disposable personal income -- was 5.7 percent in the first quarter, compared with 5.6 percent in the fourth.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 3.7 percent, or $135.0 billion, in the first quarter to a level of $15,006.4 billion. In the fourth quarter, current-dollar GDP increased 3.5 percent, or $126.3 billion.

 

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