EmailEconomic
Last Update: 26-Apr-13 08:58 ET
GDP-Adv.
Highlights
- According to the advance report, GDP grew at an annualized rate of 2.5% in Q1 2013. That is up from a 0.4% gain in Q4 2012 but below the Briefing.com consensus expectation of a 2.8% gain.
Key Factors
- Consumption spending rose 3.2%, the largest gain since increasing 4.1% in Q4 2010, and contributed 2.2 percentage points to overall GDP growth. With income growth slowing and the savings rate likely to increase and return to 2012 levels, spending will not be maintained at its first quarter pace.
- Inventories rose by $50.3 bln and contributed 1.0 percentage points to GDP. The up-and-down nature of inventory growth suggests a decline next quarter.
- Without the inventory gain, real final sales would have only increased 1.5% in Q1 2013. That would be tied, with Q4 2011, for the slowest gain since real final sales increased 0.6% in Q2 2011.
- Fixed investment increased a modest 4.1%, down from a 14.0% gain in Q4 2012.
- Nonresidential investment increased 2.1% as equipment and software spending increased 3.0% while structures spending fell 0.3%. That was the first contraction in nonresidential construction spending since falling 28.2% in Q1 2011.
- Residential construction spending increased 12.6%, which was the weakest increase since rising only 8.5% in Q2 2012.
- The trade deficit widened from $384.7 bln in Q4 2012 to $400.8 bln in Q1 2013. The increase in the deficit caused a 0.5 percentage point reduction in overall GDP growth.
- Export spending increased 2.9% after falling 2.8% in the fourth quarter. Spending on imports increased 5.4% after declining 4.2% in Q4 2012.
Big Picture
- While it is significant that GDP rebounded after the dismal Q4 2012, the underlying trends point toward future weakness across most sectors.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
|---|---|---|---|---|---|
| GDP | 2.5% | 0.4% | 3.1% | 1.3% | 2.0% |
| Inventories (change) | $50.3B | $13.3B | $60.3B | $41.4B | $56.9B |
| Final Sales | 1.5% | 1.9% | 2.4% | 1.7% | 2.4% |
| PCE | 3.2% | 1.8% | 1.6% | 1.5% | 2.4% |
| Nonresidential Inv. | 2.1% | 13.1% | -1.8% | 3.6% | 7.4% |
| Structures | 0.3% | 16.7% | -0.0% | 0.6% | 12.8% |
| Equipment & Software | 3.0% | 11.8% | -2.6% | 4.8% | 5.4% |
| Residential Inv. | 12.6% | 17.5% | 13.6% | 8.4% | 20.6% |
| Net Exports | -$400.8B | -$384.7B | -$395.2B | -$407.4B | -$415.5B |
| Export | 2.9% | -2.8% | 1.9% | 5.2% | 4.4% |
| Imports | 5.4% | -4.2% | -0.6% | 2.8% | 3.1% |
| Government | -4.1% | -7.1% | 3.9% | -0.7% | -3.0% |
| GDP Price Index | 1.2% | 1.0% | 2.7% | 1.6% | 2.0% |
