First quarter U.S. GDP revised down to 1.3%

The U.S. first quarter GDP (gross domestic product) was revised down from 1.6% to 1.3% in the “second estimate” posted Thursday (May 30) by the U.S. Bureau of Economic Analysis (BEA). Reduced consumer spending helped push the estimate lower.

Fourth quarter GDP growth remained at 3.4%.

“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 1.6 percent. The update primarily reflected a downward revision to consumer spending,” the BEA noted in the report. “Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending.”

The BEA report also said first quarter current-dollar GDP grew by $298.9 billion, or a 4.3% annual rate, to reach $28.26 trillion. The growth was revised down $28.6 billion from the first estimate.

The price index for gross domestic purchases rose 3% in the first quarter, down 0.1% from the first estimate. The personal consumption expenditures price index rose 3.3% in the first quarter, also revised down 0.1% from the first estimate.

Following are other key points in the BEA report.
• Current-dollar personal income increased $404.4 billion in the first quarter, a downward revision of $2.6 billion from the previous estimate. The increase in the first quarter primarily reflected increases in private wages and salaries and government social benefits to persons.

• Disposable personal income increased $266.7 billion, or 5.3%, in the first quarter, an upward revision of $40.5 billion from the previous estimate.

• Personal saving was $796.6 billion in the first quarter, an upward revision of $96.6 billion from the previous estimate. The personal saving rate – personal saving as a percentage of disposable personal income – was 3.8% in the first quarter.

• Real gross domestic income increased 1.5% in the first quarter, compared with an increase of 3.6% (revised) in the fourth quarter.

• Profits of domestic financial corporations increased $73.7 billion in the first quarter, compared with an increase of $5.9 billion in the fourth quarter.