U.S. First Quarter Gross Domestic Product (Text)

Following is the text of the Gross Domestic Product report from the Commerce Department:

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 0.1 percent in the first quarter (that is, from the fourth quarter of 2013 to the first quarter of 2014), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 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 (see the box on page 3 and “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the first quarter, based on more complete data, will be released on May 29, 2014.

The increase in real GDP in the first quarter primarily reflected a positive contribution from personal consumption expenditures (PCE) that was partly offset by negative contributions from exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

Annual Revision of the National Income and Product Accounts

The annual revision of the national income and product accounts will be released along with the “advance” estimate of GDP for the second quarter of 2014 on July 30. In addition to the regular revision of estimates for the most recent 3 years and the first quarter of 2014, GDP and select components will be revised back to the first quarter of 1999 (see the Technical Note). The August Survey of Current Business will contain an article that describes the annual revision in detail.

NOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2009) dollars. Price indexes are chain-type measures.

This news release is available on BEA’s Web site (www.bea.gov) along with the Technical Note (www.bea.gov/newsreleases/national/gdp/2014/tech1q14_adv.htm) and Highlights (www.bea.gov/newsreleases/national/gdp/2014/pdf/gdp1q14_adv_fax. pdf) related to this release.

The deceleration in real GDP growth in the first quarter primarily reflected downturns in exports and in nonresidential fixed investment, a larger decrease in private inventory investment, a deceleration in PCE, and a downturn in state and local government spending that were partly offset by an upturn in federal government spending and a downturn in imports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.4 percent in the first quarter, compared with an increase of 1.5 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 1.4 percent in the first quarter, compared with an increase of 1.8 percent in the fourth.

Real personal consumption expenditures increased 3.0 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. Durable goods increased 0.8 percent, compared with an increase of 2.8 percent. Nondurable goods increased 0.1 percent, compared with an increase of 2.9 percent. Services increased 4.4 percent, compared with an increase of 3.5 percent.

Real nonresidential fixed investment decreased 2.1 percent in the first quarter, in contrast to an increase of 5.7 percent in the fourth. Nonresidential structures increased 0.2 percent, in contrast to a decrease of 1.8 percent. Equipment decreased 5.5 percent, in contrast to an increase of 10.9 percent. Intellectual property products increased 1.5 percent, compared with an increase of 4.0 percent. Real residential fixed investment decreased 5.7 percent, compared with a decrease of 7.9 percent.

Real exports of goods and services decreased 7.6 percent in the first quarter, in contrast to an increase of 9.5 percent in the fourth. Real imports of goods and services decreased 1.4 percent, in contrast to an increase of 1.5 percent.

Real federal government consumption expenditures and gross investment increased 0.7 percent in the first quarter, in contrast to a decrease of 12.8 percent in the fourth. National defense decreased 2.4 percent, compared with a decrease of 14.4 percent. Nondefense increased 5.9 percent, in contrast to a decrease of 10.0 percent. Real state and local government consumption expenditures and gross investment decreased 1.3 percent; it was unchanged in the fourth quarter.

The change in real private inventories subtracted 0.57 percentage point from the first-quarter change in real GDP after subtracting 0.02 percentage point from the fourth-quarter change. Private businesses increased inventories $87.4 billion in the first quarter, following increases of $111.7 billion in the fourth quarter and $115.7 billion in the third.

Real final sales of domestic product -- GDP less change in private inventories -- increased 0.7 percent in the first quarter, compared with an increase of 2.7 percent in the fourth.

Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 0.9 percent in the first quarter, compared with an increase of 1.6 percent in the fourth.

Disposition of personal income

Current-dollar personal income increased $122.0 billion, or 3.5 percent, in the first quarter, compared with an increase of $78.5 billion, or 2.2 percent, in the fourth. The acceleration in personal income primarily reflected an acceleration in government social benefits to persons.

Personal current taxes increased $18.9 billion in the first quarter, compared with an increase of $21.4 billion in the fourth.

Disposable personal income increased $103.1 billion, or 3.3 percent, in the first quarter, compared with an increase of $57.1 billion, or 1.8 percent, in the fourth. Real disposable personal income increased 1.9 percent in the first quarter, compared with an increase of 0.8 percent in the fourth.

Personal outlays increased $131.8 billion, or 4.4 percent, in the first quarter, compared with an increase of $127.0 billion, or 4.3 percent, in the fourth.

Personal saving -- disposable personal income less personal outlays -- was $518.7 billion in the first quarter, compared with $547.4 billion in the fourth.

The personal saving rate -- personal saving as a percentage of disposable personal income -- was 4.1 percent in the first quarter, compared with 4.3 percent in the fourth. For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation’s output of goods and services -- increased 1.4 percent, or $60.0 billion, in the first quarter to a level of $17,149.6 billion. In the fourth quarter, current-dollar GDP increased 4.2 percent, or $176.7 billion.

Information on the assumptions used for unavailable source data is provided in a technical note that is posted with the news release on BEA’s Web site. Within a few days after the release, a detailed “Key Source Data and Assumptions” file is posted on the Web site. In the middle of each month, an analysis of the current quarterly estimate of GDP and related series is made available on the Web site; click on Survey of Current Business, “GDP and the Economy.” For information on revisions, see “Revisions to GDP, GDI, and Their Major Components.”

BEA’s national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA’s Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

Next release -- May 29, 2014 at 8:30 A.M. EDT for: Gross Domestic Product: First Quarter 2014 (Second Estimate) Corporate Profits: First Quarter 2014 (Preliminary Estimate)

Comparisons of Revisions to GDP

Quarterly estimates of GDP are released on the following schedule: the “advance” estimate, based on source data that are incomplete or subject to further revision by the source agency, is released near the end of the first month after the end of the quarter; as more detailed and more comprehensive data become available, the “second” and “third” estimates are released near the end of the second and third months, respectively. The “latest“・estimate reflects the results of both annual and comprehensive revisions.

Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark) revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S. economy.

The table below shows comparisons of the revisions between quarterly percent changes of current-dollar and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision (with regard to sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is larger than the average revisions from the advance estimate to the second or to the third estimates. The larger average revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend growth more than four-fifths of the time.

SOURCE: U.S. Commerce Department, http://www.bea.gov.



To contact the reporter on this story:
Chris Middleton in Washington at 
cmiddleton2@bloomberg.net

To contact the editor responsible for this story:
Marco Babic at  mbabic@bloomberg.net
Kristy Scheuble



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