Keeping you up to date on the latest data releases.
Real GDP increased at an annualized rate of just 0.1 percent in the first quarter of 2014 in the advance estimate, which was lower than most projections. An increase in consumption and a decline in imports contributed positively to the quarterly increase, while business fixed investment, residential investment, inventories, exports, and government spending all declined for the quarter. GDP has averaged quarterly increases of 2.1 percent since the beginning of 2013.
Personal consumption expenditures increased 3.0 percent in Q1, and contributed 2 percentage points to GDP growth. Residential investment declined 5.7 percent in the first quarter, which marks the second consecutive quarterly decline. Business fixed investment also declined in the first quarter, falling 2.1 percent and contributing −0.3 percentage points to GDP. The decline in business fixed investment was entirely the result of a decline in the investment in equipment. Investment in structures and intellectual property increased 0.2 and 1.5 percent, respectively, while investment in equipment fell 5.5 percent. Additionally, inventory investment also fell in the first quarter, pulling down GDP growth by another 0.6 percentage points.
Also weighing on GDP growth were a large decline in exports. Exports fell 7.6 percent in the first quarter, which pulled down GDP growth by 1.1 percentage points. Partially working against the decline in exports was a 1.4 percent decline in imports. The decrease in imports contributed 0.2 percentage points to GDP, resulting in net contribution from net exports of around −0.8 percentage points. Additionally, government spending fell 0.5 percent for the quarter, which was the result of an increase in federal government spending of 0.7 percent and a decline in state and local government spending of 1.3 percent. Overall, government spending contributed −0.1 percentage to GDP growth.