US GDP Growth Revised Lower to 2.2% in Q1

The US economy expanded an annualized 2.2 percent on quarter in the first quarter of 2018, below 2.3 percent in the advance estimate and market expectations of 2.3 percent. Consumer spending, inventories and exports rose less than expected while business spending in equipment, structures and intellectual property was revised higher, the second estimate showed.

Personal consumption expenditure (PCE) contributed 0.71 percentage points to growth (0.73 percentage points in the advance estimate) and rose 1 percent (1.1 percent in the advance estimate). Services (1.8 percent compared to 2.1 percent) slowed more than anticipated while nondurables (0.4 percent compared to 0.1 percent) rose faster and spending on durable goods shrank less (-2.6 percent compared to -3.3 percent). 

Fixed investment added 1.05 percentage points to growth (0.76 percentage points in the first estimate) and increased 6.5 percent (4.6 percent in the first estimate). Investment rose faster than anticipated for equipment (5.5 percent compared to 4.7 percent), structures (14.2 percent compared to 12.3 percent) and intellectual property products (10.9 percent compared to 3.6 percent) but contracted 2 percent for residential (compared to a flat reading in the first estimate).

Private inventories added 0.13 percentage points to growth, lower than 0.43 percent in the previous estimate.

Meanwhile, exports (4.2 percent compared to 4.8 percent) rose less than predicted while imports (2.8 percent compared to 2.6 percent) increased slightly more. As a result, the impact from trade was 0.08 percent, worse than 0.2 percent in the advance estimate.

Government spending and investment added 0.2 percentage points to growth, the same as in the previous estimate and increased 1.1 percent, slightly below 1.2 percent in the advance release.

US GDP Growth Revised Lower to 2.2% in Q1

BEA | Joana Taborda |
5/30/2018 1:24:33 PM